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Old 05-19-2012, 12:05 AM
 
Location: San Diego CA
1,029 posts, read 2,264,379 times
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We have an arm that is tied to the 1 year Libor index.
Our 1st arm adjustment was last May.

Before that we had an Interest only loan for 7 years.

So our arm is due to adjust once a year, correct?

I thought so, but the last few mortgage statements state it is scheduled to adjust in June of 2013.

Any thoughts?

I am not complaining, we are at 3.0% now.
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Old 05-23-2012, 06:45 AM
 
Location: Plano, Texas
1,675 posts, read 6,725,641 times
Reputation: 696
Yes, your ARM will adjust once a year in May, but you wont see the new payment til June.
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Old 05-23-2012, 08:26 AM
 
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Why not refi? If rates go up you could get burned. You could probably do a 5/1 ARM and lock in a rate under 3 for another 5 years.
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Old 05-24-2012, 10:15 PM
 
Location: San Diego CA
1,029 posts, read 2,264,379 times
Reputation: 608
Quote:
Originally Posted by hindukid View Post
Why not refi? If rates go up you could get burned. You could probably do a 5/1 ARM and lock in a rate under 3 for another 5 years.
We have no equity to refinance. Our loan last adjusted in May of 2011.

Isn't it supposed to adjust again this year?

If so, something changed because we are now not set to adjust until June of 2013.

Is this the bank's doing? They must be worried we won't pay if it adjusts this year? The rate on the 1 year libor did go up a little bit.

I usually pay the monthly mortgage payment at the B of A branch on the last day I can, which is the 16th. LOL. Maybe that worries them.

We have the money, but I hate to pay my bills until I have to.
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Old 06-06-2012, 10:52 PM
 
Location: San Diego CA
1,029 posts, read 2,264,379 times
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Anyways, it did adjust, I guess I overlooked the paper on it, or they did not send it. I probably overlooked it.

It went from $1470.91 to $1507.27. About $36.00 and change.

Still cheaper than renting, our neighbors pay $1800.00 in rent for the same size home.
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Old 06-07-2012, 06:41 AM
 
1,785 posts, read 3,230,143 times
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Does that 1471 / 1507 include taxes, insurance and HOA dues, or is it just your P+I ?

If it's the former, then yeah, you're better off. But if it's the latter, after factoring in things like maintenance and depreciation, your renting neighbor could potentially come out ahead.
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Old 06-15-2012, 04:31 PM
 
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I have had my 5 year arm based on the one year Libor for 7 years now. Up side is after the the 5 years is almost 50% of my payment go's to the principle. Before you think about refinancing, do the math. The Libor will have to go up huge to offset the difference in dollars going to the princple. Keep your credit perfect and this is a great mortgage to have. you pay down the home faster and when the Libor go's up, which looks like it will be a while before we see a huge spike, then refinance.
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Old 06-17-2012, 06:36 AM
 
3,584 posts, read 6,431,045 times
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Quote:
Originally Posted by Keith K View Post
I have had my 5 year arm based on the one year Libor for 7 years now. Up side is after the the 5 years is almost 50% of my payment go's to the principle. Before you think about refinancing, do the math. The Libor will have to go up huge to offset the difference in dollars going to the princple. Keep your credit perfect and this is a great mortgage to have. you pay down the home faster and when the Libor go's up, which looks like it will be a while before we see a huge spike, then refinance.
Yep. For almost the past 4 years with 1 year libor or treasure rates being close to zero.

Those who had ARMs resetting have actually seen their payments go down based on interest rates being very low.

Why doesn't congress or the media report this? And I doubt short term rates are going up for another 2 years. So these people with arms would have had significantly less interest rates for 4-6 years ongoing.

Of course it's a ticking time bomb if people cannot handle the potentially 2-5 percent bump in rates once interest rates do come back up.

Arms are great IF you understand the maximum rate you can handle.

Even interest only arms are great for certain people (people with significant assets or income to cover any potential losses....so interest only probably would be beneficial for someone in the top 5% in terms of assets).
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