10-31-2007, 02:09 PM
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Piggy Bank
Join Date: Jul 2006
Posts: 51
Rep Power: 6  |
Mortgage Interest Rates on ARM?
Is it possible for the interest rate on an ARM to decrease? I got an interest only ARM and the rate will reset in less than a year. The interest rate is 9.25% which is pretty high but I had to buy the house as a 2nd property until my previous house sold and thats why I got stuck with a high rate. When my rate resets I will probably get stuck with higher payments but I was still wondering if maybe I will be lucky and the rate will go down and maybe my payments too?<br />
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10-31-2007, 02:09 PM
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#2 |
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Greenhorn
Join Date: Jul 2006
Posts: 16
Rep Power: 0 |
Mortgage Interest Rates on ARM?
In theory, the rate can go up or down but I have never seen one go down. Call your lender and ask what the rate would be today if the rate adjusted. It will give you an idea of the future. If they won't answer you, ask what the rate is tied to and do research on what the financial instrument was at closing vs. currently.
http://www.alabama-mortgage-specialists.com |
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10-31-2007, 02:09 PM
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#3 |
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Greenhorn
Join Date: Jul 2006
Posts: 7
Rep Power: 0 |
Mortgage Interest Rates on ARM?
it's possible to decrease.....but since the rates are probably much higher than you first got them...it's likely for it to go up.
ARMs are tied to an index rate...and you will need to find out if that rate has gone up or down since you purchased your home. |
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10-31-2007, 02:09 PM
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Greenhorn
Join Date: Jul 2006
Posts: 8
Rep Power: 0 |
Mortgage Interest Rates on ARM?
It is more likely it will go up rather than down because it is based on the interest rate that is set.....you are always safer to buy a house on a fixed interest rate which right now is about 6% or so. Then you can't get caught with the changes. the question is what will it reset to...and if you can change it to a fixed rate....because sooner or later the rate is going to go really higher...it has before...it will again.
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