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Do you have an Adjustable Rate Mortgage? Did your mortgage payment Sky-Rocket?

Mortgage rates are low, but this isn't the first time. Rates have been low in the past. As a matter of fact, between 2003 to 2005, interest rates were extremely low. It was the perfect time to take out an Adjustable Rate Mortgage (ARM)... or was it?

This adjustable rate mortgage made it possible for many buyers to get into a home of their own, and it allowed those homeowners to save thousands of dollars on their first few years of a mortgage. After all, it was probably higher than your rent payment. This was a nice stepping stone from rent, to homeownership without breaking the bank. But all good things come to an end. Many homeowners are now seeing the fixed-rate introductory period of their ARM expiring.

ARMs Can Be Complicated

There are several options, with varying dates of expiration for the initial low fixed rate interest. But they all have one feature in common... the fixed rate of the mortgage expires and homeowners are faced with a new mortgage payment that adjusted to above current interest rates.  Even if you can afford the increased mortgage payment, with an ARM loan, you aren't guaranteed that your payment won't increase again with the next jump in interest rates.  Some may not adjust again for a year, others every 6 months, and some are even more often. Homeowners find themselves in a precarious position if rates increase, which could mean financial disaster.

So what are the Solutions for Expiring ARMs? With a simple refinance, you can get a LOW fixed rate loan and a mortgage payment that you know will stay the same over the life of your loan. Although you have had an Adjustable Rate Mortgage for a few years, it has probably helped increase your credit scores, thus allowing you to qualify for a great mortgage rate today. In addition, since you have been paying on your mortgage each month, you have been building up your equity.  All great qualities when applying for a new fixed rate mortgage today.

Having an Adjustable Rate Mortgage doesn't mean that you have to stay with a mortgage payment that is sky-rocketing. There are many solutions that will make your mortgage more affordable than ever.

Talk with a Mortgage Professional TODAY about your options. Getting a home loan, at a low rate, is still very attainable.  Be sure to check out another post about Debunking Mortgage Myths. The post is written about 3 myths that are around today, although very untrue, at least in the state of Texas. 

 

Always available for your Frisco Texas Mortgage needs!

John Cannata  Reliant Mortgage  p# 214.545.5604  

www.JohnCannata.com

Frisco Texas Mortgage Consultant

 

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Are you looking to purchase a Texas home?  Perhaps you love your Texas home but would be interested in refinancing your Texas mortgage to a lower interest rate?  

I'll help you get pre-approved for your Texas home loan and even suggest some very knowledgeable and professional Real Estate Agents in your area of choice.  If you are available to talk, I am available to listen.  Give me a call or visit my website for more details.

Do you want to know all of your mortgage options? Call me today and let's discuss them further.

Texas Home Loan Consultant

Always available for your Texas Mortgage and Home Loan needs!

John R Cannata    P#214.728.0449

NMLS # 322646

Texas Home Loan Expert

Frisco TX Mortgage

      

 

The views expressed on this site are mine alone and do not reflect the views of my employer.

Comment balloon 6 commentsJohn Cannata • July 09 2009 06:36PM

Comments

LOL! In Florida, refi's only happen in dreams:) Negative equity is not going to get an appraisal that will get a refi:) Unless of course you bought your home before 2002 and did not refi it or get a HELOC after that date:)

Posted by Katerina Gasset, Get It Done For Me Virtual Services (Get It Done For Me Virtual Services ) over 9 years ago

Good Gawd, do people still have this crap?

Posted by Greg Nino, Houston, Texas (RE/MAX Compass, formerly RE/MAX WHP) over 9 years ago

ROTFL at Nino's comment.  This is great info for people...I never could understand getting an ARM when rates have been so darned low.

How the heck are you anyway?  I've been too busy, but am finally catching a much needed break :)  It's good to be back!

Posted by Elizabeth Cooper-Golden, Huntsville AL MLS (Huntsville Alabama Real Estate, (@ Homes Realty Group)) over 9 years ago

Katerina - I figured someone in another state would have a little something to say about this... so i was sure to say 'TEXAS' somewhere in there  LOL.  I know that it would be tough to the refinance completed in Florida. Then again, in those states many lenders are just making the adjustments for them so they would not need to refinance anyway (unless of course they could not afford the house in the first place).

Greg - Yes sir. Still many ARM loans out there. I think people just feel they wont worry about it until the adjustment happens. Then suddenly they want you to complete the refinance before the rate change takes place (sometimes less than 30 days away). Im not complaining... call me if you have the ARM and you want it FIXED.

PRINCESS!! Glad to see you. I noticed you updated your blog recently but it was a listing.. :-(   I completely understand being too busy though. I try to skip sleep in order to get my posting, commenting, and still get work done. I dont recommend it for many. We will be here when you are ready for us. Miss ya! I hope all is going well for you!

Posted by John Cannata, Texas Home Mortgage - Purchase or Refinance (214-728-0449 http://TexasLoanGuy.com) over 9 years ago

Great advice! We didn't see a lot of ARM's here (except in the second mortgage market). It seemed everybody wanted 80/20 because they could avoid the PMI. I told a bunch of folks (and they did it), "As low as interest rates are, pay the PMI, it's safer". Now because our values have not sunk like a fast sinking ship, these people are happy because a lot of them can get that PMI taken off. I have heard people say the can't sleep at night worrying about those ARM seconds.

Posted by Linda Breeding (Keller Williams Realty ) over 9 years ago

ARMs are not a fun breed of mortgage Linda. I'd say the only time an ARM is good is when you do not plan on living in the house for more than 3 years. Even then, you still dont know what the market will be like in 3 years so perhaps its not worth it. Right now, Fixed Rates are actually lower than ARMs in most cases. If the ARMs are lower, its not much lower. Not enough to consider it anyway - IMHO

Posted by John Cannata, Texas Home Mortgage - Purchase or Refinance (214-728-0449 http://TexasLoanGuy.com) over 9 years ago

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