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Answers (1)
- Andrew Adams, "203K Specialist"
- Contributions:9349
You need to look at your note and find out
The index (1 year tresasury, libor)
The Margin (anywhere from 2-3% or more if it is a bad loan)
The caps (initial, annual and lifetime eg 5/2/5 or 2/2/6)
You add together the current index to the margn round up to the nearest .125% in most cases. Make sure that number is neither higher or lower than the initial rate cap and you have the adjusted rate. If the change is greater than the initial cap limit the change to the cap.
Most ARMS comming due will actually be going down. The dlema is that rates are at historic lows at a current rate of 5.6% you could refinance your loan and lock that rate or lower in for 30 years. The only catch is your property value. You need to have the equty to refinance.
The index (1 year tresasury, libor)
The Margin (anywhere from 2-3% or more if it is a bad loan)
The caps (initial, annual and lifetime eg 5/2/5 or 2/2/6)
You add together the current index to the margn round up to the nearest .125% in most cases. Make sure that number is neither higher or lower than the initial rate cap and you have the adjusted rate. If the change is greater than the initial cap limit the change to the cap.
Most ARMS comming due will actually be going down. The dlema is that rates are at historic lows at a current rate of 5.6% you could refinance your loan and lock that rate or lower in for 30 years. The only catch is your property value. You need to have the equty to refinance.
Expected interest rate after 5/1 ARM over?
I have 5/1 ARM 5.6% interest rate contract and first 5 years fixed interest term will be over 9/2009. After 10/2009, what will be expected interest rate?
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