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Is there a new type of ARM that only adjusts down?

On the radio today, I heard about a new mortgage option that automatically resets whenever rates decline by at least 0.5%. This ARM does not reset upwards, and will stay at the lowest rate it reaches, even if rates start to go up. What is the name of this ARM, and where can I get it?
  • April 11 2009 - Mountain View
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Answers (3)

You didnt state what the start rate is. Instead of some super new loan, this sounds more like someone offering to do a no closing cost refi should rates drop 1/2 point, although they are wording it in a way that sounds new or different. If you are paying closing costs on the initial loan, it should be aprx 4.625%-4.75%, but I suspect the start rate will be more like 5%. If it is say 4.625%, then par rates would have to drop to 4.125% to trigger the adjustment down and a 4.125% par rate is not likely to ever happen. It is highly unlikely there is a loan that 1 sided in favor of the borrower with a cap on rate increases. If you remember the name of the lender, please post it.
  • April 12 2009
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Profile picture for Mr Caveat
sounds like wamu's good ole heloc mortgage plus program, except as a primary on a home? i cant imagine that its a true arm. either way, i have a feeling there are strings(like it resets to the going rate after 3-5 years, even if its "up"
  • April 12 2009
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If you find one, you let me know the lender name and phone number.
  • April 12 2009
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