Oops, our mortgage rate resets 2 months later than expected
Last week, I explained how we’re going to save big money on our mortgage when our rate resets. In the article, I thought the rate would reset on the anniversary of our closing, which would be this November.
However, I just logged into our lender site and the “Next ARM Adjustment Date” isn’t November. It resets on 01/01/2010.
So, I originally thought the prime rate would be picked on Oct 1st, but now I see it should be Dec 1st instead. What will the 6-month LIBOR do before then?
Right now, the LIBOR is at .67. Last week it was at .70. It’s still going down, but how low will it go? I was excited for Oct 1 to come around, now I’m worried about what our rate will be again. Either way, it will be less than what we’re paying now as I doubt the rate would jump up to 3% (add our 2.25% margin rate to get to our current 5.25% rate). And then we have another 6 months to refinance/sell/whatever.
And if your suggestion is that I better refinance now while rates are low, we’re in a bind as we’ve lost most of our equity in the last couple of years, so refinancing would be an expensive proposition.
Possibly related posts:
- Will our adjustable rate mortgage save us big money?
- Our Student Loan Interest Rate Went Down by 1%!
- Share the Love Review #2 – Rate Ladder
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Clever Dude and his bride started with $500k in debt and in just 4 years, it's down to $300k!
Clever Dude,
Many people I speak to are in the same situation as you are. At the moment, your fully amortized rate is low and it probably will be going into next year. However, you are probably wrestling with the idea of converting to a fixed rate for some peace of mind. Now to your problem which apparently is the value of your home….
There is a program called DU Refi Plus which will allow you to refinance up to 125% of your home value. However, your current loan needs to be owned by Fannie Mae. You can check using the Fannie Mae lookup tool >> http://loanlookup.fanniemae.com/loanlookup/ If they recognize your property address, then you should inquire about refinancing.
If you found this information to be helpful, then you can read more about your loan options and frequently asked mortgage questions at http://www.dreamhomefinancing.com
Also, I would be more than happy to provide a link to cleverdude.com on the “Useful Links” page.