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Does anyone have a LIBOR rate loan? How low is your rate and how often does it adjust? My rate is 2.78% and adjusts every 6 months. I would like to sell this house and buy another house before rates climb back up. I am looking to buy within 2 years.
Adjustable rate loans typically adjust every 6 or 12 months. The exception were the monthly Pay Option ARM's which adjusted every 1 month. The LIBOR index tends to be a more volatile index, meaning when rates are low it'll be one of the lowest and when rates are high it tends to be one of the highest. Most margins (index + margin = your interest rate/fully indexed interest rate) are 2-2.75%, and given the low LIBOR rate (0.43%), the fully indexed rates should be right around where yours are. Realize that some people have an ARM that is still in the initial fixed rate period, so their rate wouldn't be based on the index + margin yet.
I don't see how the second part of your post, about selling & then buying, directly relates to the first part. Was there an additional question you had relating to buying & selling? Were you thinking about purchasing a home with another LIBOR ARM and that is why you wanted to find out what the going LIBOR ARM rates are? Most ARM's will have an initial fixed period, usually anywhere from 1-10 years, at an interest rate that is higher than the current fully indexed rates on ARMs (shorter term ARM's aren't much higher - still in the 3's). Finding a 1-month ARM, where the fully indexed rate is immediately based on the current index, are tougher to find.
I would like to sell my home with the Libor before interest rates climb back up. I would also like to buy another home with a fixed rate VA loan. My Libor was fixed for 5 years but I am in the adjustment period now.
That's was a great explanation!! Thanks!
You are welcome. I don't think your LIBOR rate will get unmanageable for the next couple years, although I could see it getting to 5-6%. Depending on how you think home values may go, and your financial position in relation to mortgage interest deduction and what not, it'd be wise to talk to a few agents to find out what your home could sell for now vs. what the market is projected to do 2 years from now. There is quite a bit to consider, and it'd be wise to talk to some professionals to see what potential obstacles there could be, if any, with your plan.
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