I keep hearing about all these horror stories about adjustable rate mortgages.?

my husband and i bought a house about a year ago and got an adjustable rate loan. It is good for two years and I have an early pay off penality. So should I be worried about foreclosure in a year, should I go ahead and refinance now and pay the penality? I am scared we will lose our home.

I keep hearing about all these horror stories about adjustable rate mortgages.?

There are many different types of ARMS and unless we know what kind you have...how long you plan to live in the house it is hard for us to advise you on what to do. Here are a few options.

All ARMS (adjustable rate mortgages) have different caps as to how much they can go up when it is time to adjust. Some can only go up 1/2% which is very little risk and is probably still better than you will get refinancing. Some can go up as much as 9% and higher and sometimes more than once a year, which is scary and may put your payment out of reach.

It depends on the penalty...whether you should refinance now. Again, all loans have different prepayment penalties. Some make you pay the interest through the rest of the 2 years. Some make you pay a set amount such as $5,000.

You could always set up a refinance in another year to take place at the same time as your rate change...that way you will not pay the penalty. You can continue to get the benefit of the low interest payment of your ARM until then (there is a reason you got it to begin with) and you won%26#039;t ever see the hike. The risk there is a dramatic change in interest rates between now and then.

I also mentioned how long you plan to live in the house because if you don%26#039;t plan to stay long...the an ARM is often times a good idea. If you are going to sell shortly after the rate change, it may save you more money to not refinance (as there are more closing cost when you refinance).

Sit down and look at your ARM, do the worst case scenario math as far as rate change..prepayment penalty and current loans and see what you think is best for you.

Good luck. And please please when you refinance do not take money out.

I keep hearing about all these horror stories about adjustable rate mortgages.?

refinance now with Countrywide and get a fixed rate for 30 years. Very affordable and easy. Also if you want to pay your house off eary, there are loans that let you make payments twice a month.

I keep hearing about all these horror stories about adjustable rate mortgages.?

i%26#039;d definitely refinance into a fixed rate 30 year mortgage NOW, because the rates are very low, and, yes, i know all about your type of ARM. it is dangerous.

but if i lived in your skin, i%26#039;d do an awful lot of reading about the current affairs at countryside! my, my, they really are getting a bad reputation!

the bank where you bank at is usually your best bet. they know how you handle your money. you also get the sunday newspaper that has a real estate section and look on the first page of it. there, you should find a large variety of different lenders. the best and most likely to close without any hassles are those that have essentially the same interest rates, costs, fees, points, etc. so if one out of ten sounds too good to be true, believe me, i%26#039;ve seen it, they are too good to be true! don%26#039;t fall into their traps.

refinancing is expensive, but worth it in your current situation. your lender, though, should provide you with one thing. it will surprise her when you ask for it. she should be able to show you how long it will take you to regain the money you put out to refinance, and what effect a new mortgage will bring to you, in dollars.

to save thousands of bucks and years in paying off that 30 year loan, do what the wise do: there%26#039;s no prepayment penalty on residential property (even though you claim that you%26#039;d get slapped with one on your current mortgage, sounds very unkosher to me). so every month, take at least 1/2 of the money that you%26#039;d put into savings, even if it is only $20, then send it to your lender marked in the memo area of your check, as well as on the back side, %26quot;principal payment only for loan number x,%26quot; where x represents the actual loan number. also, take your income tax return every year and send that in as prepayment of principal.

if you tell your loan office to give you two amortization schedules, both at the same rate of interest, one for 15 years, and one for 30 years, you will see how much money is saved and the number of years to pay saved too. your deductions from your income tax for real estate taxes and for interest on your mortgage should supply a great enough refund to use to lower your PRINCIPAL balance as quickly and as much as possible.

I keep hearing about all these horror stories about adjustable rate mortgages.?

I dont mind our ARM loan it can only go up once a year and has a cap that it can only go up 5% so over all for us at the max it can only reach 8%. Right now I am still under the rate of a fixed loan so intend to stay with my arm till it becomes a cheaper option to switch to a fix rate.