Comments on: Our adjustable mortgage rate reset! Oh No!

By: TimD

TimD — Fri, 15 Jan 2010 23:01:37 +0000

CleverD, luckily I am in the same situation as you. I adjust from 4.65% down to 2.8%. But word of warning, don’t go spending all the money just yet. You may be losing a similar amount as a tax write off (less interest paid, less interest to write off). Great for cash flow, but you may be paying it back at the end of the year.

By: Paul @ FiscalGeek

Paul @ FiscalGeek — Tue, 08 Dec 2009 16:53:04 +0000

FYI I just closed yesterday on my refinance. My first happened to be with Wells Fargo who is one of the few that is actually using the Making Home Affordable plans. If you have a Freddie Mac or Fannie Mae loan you could qualify. I don’t blame you for loving that super low rate but that would scare the crap out of me not being able to lock in a fixed rate. Worth some phone calls, I recounted my process in yesterday’s post. It’s not quick but man rates are so low right now it would be a shame not to lock it in.

By: Jerry

Jerry — Fri, 04 Dec 2009 16:00:04 +0000

We are doing something similar with Wells Fargo. I think it was part of the Obama stimulus plan. Anyway, we get a lower interest rate and I’m happy. We need all the help we can as insurance to get through this slow economy. Good for you on your rate. It looks like you are in good shape for a while. I never liked the ARM products not being sure where I’d end up. We have a fixed and we’re happy with it. But, if rates stay low, it may lead us to refi soon.
Jerry

By: LAL

LAL — Mon, 30 Nov 2009 20:25:15 +0000

Nice deal. I have almost 3 years left on mine ARM but I’m watching rates and seeing where things go. When our mortgage gets to a traditional size, below $417k, then it’ll be easier to decide as well.

By: Clever Dude

Clever Dude — Sun, 22 Nov 2009 22:04:32 +0000

@Financial Samurai, actually I didn’t refinance. It was a rate reset.

By: Financial Samurai

Financial Samurai — Sun, 22 Nov 2009 03:41:17 +0000

Tim, whatcha mean cheap money is not available? Clever Dude just said he refinanced for a great rate! I called up my mortgage guy and he said I can get similar rates too.

Just call your bank. I’m sure you’ll be able to get some good rates too.

By: Tim

Tim — Fri, 20 Nov 2009 17:26:36 +0000

@Clever, I didn’t say I didn’t believe it, because I know there are Libor ARMs; however, I was fixing on the term “Prime” which connotes something different. Plus your definition of the “Prime” rate in the OP made it seem more like you were talking Prime vice Libor Index rate. So my question was how you were explaining Prime and the use of Prime. I should have assumed you weren’t talking actual Prime since you did mention you had an interest only ARM, which would confirm the lower rate you were getting. anyways, a moot point since you know the rate you are getting.

what to do with the extra money: save to get the 10% so you can get a fixed rate as soon as possible. BTW, b/c libor index is higher than others, you are paying about .25% more.

By: Tim

Tim — Fri, 20 Nov 2009 17:12:15 +0000

@Clever, I didn’t say i didn’t believe it. “Prime” is what had me confused and i stated so much.

By: Thirtysomething Finance

Thirtysomething Finance — Fri, 20 Nov 2009 16:01:50 +0000

First off, congrats — sounds like you’re in a good place for the next year!

A refi in this market is a little tricky, but it can be done. Long story short (and I intend to post the details of the long story one of these days), I have a 30 year fixed mortgage and a HELOC. My HELOC was frozen by my bank in January of this year, but I obtained an appraisal that showed a nice amount of appreciation and got them to unfreeze my HELOC. I immediately took out the principal I’d paid down, as I had been using that as my emergency fund.

Then, when rates were super low towards the end of spring (lucky timing –I could not have predicted this), I applied for a refi. Even though I’d just gotten an appraisal, I needed to obtain a new, independent appraisal, and it came in lower than the appraisal I’d obtained on my own. However, it still showed appreciation from what I’d initially paid, and in the end, the LTV ratio worked out such that I was able to refinance my 30 year fixed mortgage to an even lower rate.

My point is that you might be surprised at what your home would appraise at. Of course, the other trick is getting your second mortgage lender to subordinate, but I was lucky and had a good mortgage guy who helped me work through the process.

Good luck with everything, and keep us posted!

By: Clever Dude

Clever Dude — Fri, 20 Nov 2009 14:45:45 +0000

@Tim, I think you’re over-analyzing the whole situation. The letter specifically said my rate was going down from 5.25% to 2.875%, so yes, I have it in black and white.

I’ve read my contract many, many times and I’m positive I know what I’m talking about here. It’s the 6-month Libor rate (.56) plus a 2.25% margin. If I’m using one word wrong, I apologize, but that’s what I have. I’m sorry if you don’t believe it, perhaps because of my wording or that the rate is so low, but that’s what it is and that’s what I’m paying.