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I'm currently unemployed, recieving UI, loan was through B of A, I know I neeed to refinance. But I'm flat broke. I don't want to stay in this house forever, but for now it's OK. I've thought about a 10/1 ARM or 30 year fixed (i'd like to be out of here and on to a bigger house in 10 yrs.) My payment is big. I'd probably lose the house (I'm thinking) once the 5 yrs. is up, but I don't want to get to that point. What should I do?
You still have two years before the hammer drops, a lot can change in that time. I would wait to see what the world looks like in 18 months before making a decision. The economy will have returned by then, or we're all doomed...! I also took on a couple of roommates to get through the tough time. One has to scarifice to win. That doesn't work so well if your married with children.
It would be best to refi now, while rates are low, but if you're unemployed, that may be tough.
We have a loan through BofA and they are offering us a no cost refi. because it's no cost, the interest is slightly higher, but worth it if you can get into a 30 year fixed for no cost.
Look on your mortgage website for a phone number. I went to my local banker and they didn't know anything about it, but every time I call thge mortgage divisdion with a question, they always tell me I'm eligible for a "No Cost" refi.
I haven't done it because my ARM adjusted down this year from 7.765%, down to 6.00%. that's because my loan is older and already adjusted from the original 3.625% all the way up to 7.65%, over five years.. I made it through the tough times, now it's back where it should be.
If you could get what they offered me, around 6.125% fixed, you would win. don't know about the lack of job tho..
Without a job you will not be able to refinance. And just because you have an ARM, that doesnt mean the rate will increase when it adjusts. Just like the above poster who has an arm but their rate just went down. Find your closing documents which will let you know what determines where your rate will go. All ARM's will adjust according to a index and a margin. Your margin is always the same, probably between 2 to 3%. Your index will be either the MTA or a libor index. You can look in any business section and it will let you know the current value of the index. So, when your loan is about to adjust, add your index and margin together and you will know what your new rate will be. Also, please keep in mind an adjustable rate mortgage has never caused someone to lose their home. Just like a gun has never killed a living thing. A person holding a gun has killed many. So, it is not the ARM that causes the foreclosure, it is the home owner.
You have two years to worry about this. I wouldn't lose a minute's sleep over it. My ARM is set to adjust in 11/09 and will probably go down. I'm not worried at all.
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