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Answers (5)
Best Answer
- Ray Blindauer, "SigmaWealth"
- Contributions:246
You should review your loan documents to confirm, but most conventional ARM programs will have a margin of 2.25% and be based on the 1- year LIBOR which is currently at 0.86%. Add these two together and round up to the nearest eighth percent and this is what your interest rate would adjust to if these are the parameters of your 7/1 ARM. In this case, your interest rate would adjust to 3.125% and be fixed there for the next 12 months.
Typical caps are 5/2/5. This means that your initial adjustment cannot adjust higher (or lower) than 5% and any subsequent adjustments cannot be any higher or lower than 2%. The last 5 indicates the lifetime cap of your interest rate and that it cannot be higher than 5% of your initial interest rate.
If you can't refinance, you may be pleasantly surprised with your new interest rate at the time of its adjustment.
Typical caps are 5/2/5. This means that your initial adjustment cannot adjust higher (or lower) than 5% and any subsequent adjustments cannot be any higher or lower than 2%. The last 5 indicates the lifetime cap of your interest rate and that it cannot be higher than 5% of your initial interest rate.
If you can't refinance, you may be pleasantly surprised with your new interest rate at the time of its adjustment.
- Scot King, "CAMtgBrokerCPA"
- Contributions:30
Hi, I'm Scot in Costa mesa. You need to find out if you're in the databases at Fannie Mae or Freddie Mac.
http://www.fanniemae.com/loanlookup/
https://ww3.freddiemac.com/corporate/
If you find a match, then it's possible to go to 125% of your home value. What is your rate now? There are ARM products available for HARP as well as fixed.
Let me know if you want some specifics.
http://www.fanniemae.com/loanlookup/
https://ww3.freddiemac.com/corporate/
If you find a match, then it's possible to go to 125% of your home value. What is your rate now? There are ARM products available for HARP as well as fixed.
Let me know if you want some specifics.
- wayne lancaster, "funds2"
- Contributions:1174
Even if a FNMA-FHLMC or FHA existing loan, it would be prudent to review you loan documents and determine the margin, Index, and max. rate adjustment end of year 7. You may be pleasantly surprised to learn that you rate may adjust to below 3%. Though that is only for next 6-12 months, it may give time for market to rebound and refinance in the future.
If current loan is FNMA/FHLMC or FHA you can explore your options/cost and compare with 7/1 adjustment details.
If current loan is FNMA/FHLMC or FHA you can explore your options/cost and compare with 7/1 adjustment details.
- Clay Branch, "Georgia Loans"
- Contributions:7834
If you will be holding the property for more than 2-3 years then try to refinance if you have a Fannie or Freddie loan. Better yet, if it is an FHA or VA loan, then no issue with refinancing.
7/1 ARM Mortgage
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