ARM, adjustable rate mortgage coming due
You probably either have an Adjustable Rate Mortgage (ARM) or know someone who does. Over the last few years, many consumers chose an ARM in lieu of a fixed rate, because short term interest rates were so low, which made them hard to resist.Are you a homeowner currently in an ARM who is concerned if you will be able to handle the payment increase when your loan re-sets? Whether you choose to get another ARM loan or a fixed rate product, odds are that these rates are much lower than what your current loan will adjust to. Another potential issue… you may find out your home is not appreciating like it was a few years ago. In fact, it may have gone down slightly. This can be a huge hurdle for you to qualify for a refinance, and that’s why we strongly recommend doing something sooner rather than later. Who knows what your value will be down the road…
Many ARM programs, particularly those with an option ARM, offer the ability to make interest-only payments or payments that are less than the full amount due each month. If you only made the minimum payment on these, your loan balance will remain the same and can actually increase with each minimum payment you make if you’re in an Option ARM product.
What does this mean to me? If you closed on an ARM with Choice Finance® or another lender and your interest rate is scheduled to re-set in the next 12 months, you will probably see a significant payment increase.
Tags: 1) Questions for Loan Officer, adjustable rate mortgage, ARM, ARM coming due