Advice on ARM's (Adjustable Rate Mortgages)
 

If your adjustable rate mortgage is going to expire
in the next 6 - 12 months, then you need to prepare
to refinance or expect a payment increase
of $200-$300 per month on your mortgage payment.

How will your lifestyle be impacted with spending more on your mortgage every month?

Mortgage programs which existed months and years ago, do not exist today, will you be forced to sell your house if you can't afford the higher payment?  Because of a tightening of the market, lenders have discontinued loan programs which catered to higher risk borrowers.  100% financing is harder to obtain, rates are now higher for those with lower credit scores, minimum scores for stated income have risen, plus more.    Don't get caught unprepared.   Now is the time to plan for this change which is on your horizon.

The average margin increase is 2.75% when your arm adjusts.   For example, if your rate was 6%, it will now be 8.75%.  So, on a $250,000 home loan, this increase translates into $468 more per month you will have to spend on your mortgage payment.

Those with perfect credit will find the refinance process easier in most cases, however those with credit scores under 660 may find it more challenging to find loan programs favorable to your borrowing situation if you have late payments or other derogatory information reporting.

The time is now to prepare for this change.   You should pull out your Truth In Lending Statement or ARM Rider to find out what your Margin is going to be.  Then you need to get copies of your credit report to find out what your scores are.   If your scores are low, then you need to make some changes to get your score increased so you can get favorable loan terms.  By planning in advance, you will be better prepared to deal with the forthcoming change.

Here is how I can help.   Contact me to set up an appointment to sit down and review your situation.   I will first calculate what your payment increase will be if you do not refinance.   I will then pull a copy of your credit report and point out areas which you can make changes to get your score increased if needed.  There is no obligation as the session is complimentary.  We only move forward when you are ready and if you choose to use my services.   But in the meantime, you know exactly where you stand with the forthcoming change.

Don't put yourself in a situation where you ignore this serious matter until a month before your arm adjusts, or worse yet after your arm adjusts and you have to make that higher payment.  Deal with it now so you are prepared for the change when it comes.