Our first ARM adjustment.

**ZMagnum** · 05-09-2009, 04:17 AM

Our 5/1 ARM was almost due to adjust. Our last payment of the first 5 years is the June payment. We looked into refinancing and got a no from our bank and a yes from our mortgage company but for $100 more a month. Then later everyone said no. We were upsidedown by $8,800. So we decided to take our chances and just wait and see what happens. Our ARM is LIBOR + 2.25% with a maximum of 9.875%. LIBOR is really low right now.

The interest rate for our first 5 years has been fixed at 4.875%.

We got a letter in the mail today showing what our new rate will be.

Can you believe 4.125% for the next year?

Our monthly payment will go down $40 a month for the next 12 months then it will be due to adjust again.

We are happy to say the least.

**eldiablosrt8** · 05-09-2009, 04:46 AM

congrats thats how i lost my condo but we are struggling to keep the house..... ahhhhhhh less work sucks

congrats on the holdout

**FactoryD** · 05-09-2009, 06:52 AM

Congrats?

Start shopin' buddy. The writing is on the friggin wall!

**SnowgodCCR** · 05-09-2009, 12:17 PM

Don't count on that happening again next year...

**ZMagnum** · 05-09-2009, 12:32 PM

If rates go up along with home values we should be able to refinance next year. But if I see the LIBOR staying low like it is now we are just going to sit tight.

**GasGunR** · 05-09-2009, 02:05 PM

As others have said, be careful here...

I'd wait 9 mos and then see if I couldn't get in a fixed rate loan, you're playing with fire.

**FLEX** · 05-09-2009, 02:13 PM

That sounds good. No way you can lock that in for more than 12 months?

Never seen a mortgage based on LIBOR before...that's different.

If the economy turns around you could be looking at a significant increase in 12 months...

-=FLEX=-

**ZMagnum** · 05-09-2009, 02:14 PM

Thanks for the concern guys but even if the ARM went to its max it would be $200 more a month. It's a lot but not enough to put us on the street. I think the key is we have a small loan on a cheap/small house.

Posted via LXFMobile

**FLEX** · 05-09-2009, 02:18 PM

Originally Posted by ZMagnum

Thanks for the concern guys but even if the ARM went to its max it would be $100 more a month. It's a lot but not enough to put us on the street. I think the key is we have a small loan on a cheap/small house.

Posted via LXFMobile

Oh, I see. Being from the Toronto area where house prices are astronomical, a significant increase in the interest rate could easily make an existing mortgage unaffordable.

It happened here in the late 80's when mortgage rates went up into the teens. A lot of people lost their houses.

-=FLEX=-

**ZMagnum** · 02-01-2010, 06:15 PM

Back when our ARM adusted LIBOR was 1.8769%. It has gone down every month since and is now 0.84625%.

**Greg095** · 02-01-2010, 06:23 PM

I know how this goes. I'm struggling month to month to keep my house. I have another year before the ARM kicks in, but I'm about $20k upside down. Refi is not even close to an option.

**ZMagnum** · 02-01-2010, 06:27 PM

Originally Posted by Greg095

I know how this goes. I'm struggling month to month to keep my house. I have another year before the ARM kicks in, but I'm about $20k upside down. Refi is not even close to an option.

Well hopefully you have a LIBOR based ARM or whatever the ARM is based on is going down. You may end up with a lower payment like me.

**slideway** · 02-01-2010, 08:32 PM

I've had a 1yr. ARM on a 30yr. mort. since 1993, Worked out very well. Saved both on the mostly lower rates at reset and also the several re-fi's I would had to do by now. It's currently at around 3.75%.