For the past several years almost one-third of all mortgages in the United States have been Adjustable Rate Mortgages. While there are different types of Adjustable Rate Mortgages (ARMs), they all have one thing in common; all ARM loans have an introductory period with fixed monthly payments. After the introductory period the loan changes to the adjustable interest rate; this interest rate is typically the T-bill rate plus a premium of one to three points.
Homeowners with recent ARM loans will shortly get hit with large jumps in their monthly payments. For many homeowners, a payment that was $1600 will soon jump to as much as $2000 each month.
Refinance Your ARM to a Fixed Interest Rate Mortgage
Many homeowners are refinancing their housing debs into traditional fixed-interest rate mortgage loans. This protects from future interest rate hikes. These homeowners enjoyed lower payments until now. If they do not refinance now they will pay a high price for it.
My name is Rob Regehr and I’m a personal finance writer with a chip on my shoulder for banks and brokers that take advantage of my friends and neighbors.
