Question by joe g.: My ARM on my mortgage is set to raise on the 1st of March. What should I do to keep my morgage payment down?
My ARM on my mortgage is set to raise on the 1st of March. Based on my index value its going up 4.5%. So my mortgage payment is going up about 0 more on my payment which is not going to hold well for us financially. Our credit is currently challenged but not horable. What is the first steps we should do on keeping our payments around the same. Also with rates going way down, should we refinance to a fixed rate?
We’ve been with our morgage lender for 3yrs now. My 3 year ARM is expiring. March 1st is my scheduled new payment. Should our mortgage lender work with me instead of losing my business with them?
Best answer:
Answer by godged
Contact your lender and see if they will do a low cost re-finance into a fixed rate loan. If you don’t get a positive response, go shopping! Contact local lenders who will know about programs in your area that you can qualify for.
What do you think? Answer below!
sell your home and downsize.
there isn’t anything else you can do when the ARM comes loose.
Refinance now! Rates are down. I am refinancing currently from at 6.875% 30 yr fixed to a 20 year 5.5%. My payments will be about the same but I’ll save a lot of interest over the life of the loan, not to mention I’ll be cutting off 4 years off my mortgage (i’ve owned my house 6 yrs now)
Refinance is the only way to avoid the change on your rate. Didn’t you realize this would happen when you got the loan? Depending on how long you’ve had the loan, you may not be able to refinance. If it was a new purchase, many lenders require a “seasoning” of 6 months to one year before they’ll refinance. Also, a lot of ARMS have prepayment penalties.
Call a couple lenders, after checking for prepayment penalty, including the lender that has it now.
There is no question that you should refinance, but as the other respondant said, see if your current lender is willing to help to keep the cost of the refi down. If not, a refi could cost $1k or $2k, which may not be an option for you. OR, if refinancing to a lower rate knocks your mortgage down enough, have them attach the cost of the refi to the new mortgage….after all is said and done, you may be paying less than you are now.
Refinance into a fixed rate mortgage today. Call no less than three brokers. You can run your credit up to 10 times in a month as long as it’s for a mortgage, it only counts as one inquiry.
No matter how high the rate is for you, it won’t adjust to a higher rate in the future.
Fixed rate financing will always cost more over a period of 5 years than variable rate financing.
Fixed rate mortgages give you an opportunity to lock in at a given rate, but no assurance the rate will be lower than variable rate over the whole term. What it may be is lower than other fixed rate mortgages over the term. Even that is not assured.
4.5 is not worse than most are paying for fixed rate.
Moving to a lower cost home will cost you at least a year’s interest. But if the price is lower by more than that, you should consider it.
Paying down early even by selling other assets can be worth while.
Refinance your loan as soon as your prepayment penalty is over( most likely you have one). Current rates are great so I would do it as soon as possible.
I recommend you shop around and see who is able to give you the best deal.
If you can, refinance. Rates will not get much lower than they are now. As the rates rise, which is inevetable (the FED can’t keep the rate this low while inflation continues to rise), so will the rate on your ARM. The $120 increase could seam minimal compared to what you might see in a 1 year.
You may want to consider refinancing into a fixed rate so you don’t have to worry about any more adjustments. sit down with your loan officer and have him/her work up some options.