5 yr ARM Just at 2 yrs over, bank just lowered rate againSeven years ago my husband and I refinanced our 30 year fixed mortgage (original loan in 2001 for $137k at 6.25%) and in 2004 got a 5/1 ARM w/ 5.25%. We are in our first home, were positive that we would be gone within that 5 years. Over those 5 years we made money pitfalls, as most of America it seems did... Our credit ratings took a hit, mine mostly... Which is probably ok considering I'm not the money maker. We do have a couple late pays on our mortgage, thats killer! Last year we got a letter telling us that our interest rate is being adjusted and our new rate was now 4.125%!!!!!! Then marital issues took the driver seat. But i will say that thankfully our finances are in good repair. My husband was even able to get a credit line for when we needed to replace a major appliance. June I remembered that we stood a good chance at having our payment go up, so I when i called the bank she told me to check the 12 month LIBOR for Sept, and that would affect out DEC payment. New LIBOR, new bank letter. Our interest is now 3%!!! So our payments are $970 now (started around $1275). We owe $128k Our house would most likely catch anywhere from $195-$180k. My question is... What do we do? We have outgrown our house. But now we dont know if we are stuck. I dont know if i gave enough info. But i really need some guidance.October 22 2010 - Crown Pointe0YesReport a ProblemProblemSelect oneOffensive contentIrrelevant contentSpam (pure self-promotion)OtherDetailsYour emailPlease enter a valid email address.Submit CancelContent flaggedWe will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.We're sorry. This service is temporarily unavailable. Please come back later and try again.