Posted on: 16th Aug, 2009 09:43 pm
My five year arm interest rate reset in January of 2009. Why did it reset at a higher rate (1 percent), when mortgage interest rates were much lower than when I originally received the loan?
hi,
if the prevailing mortgage rates were lower than the initial interest rate on your loan, you should have got a low rate when your mortgage reset. it has been quite some time since the mortgage reset. did you not ask your lender why the mortgage reset at a higher rate, while the prevailing rates were low?
if you think the interest rate on your loan is quite high, compared to the current mortgage rates, you can look to refinance the loan. given there's enough equity in the property and you qualify for a loan, a refinance will be a good way of taking advantage of the current low rates. though the market rates have increased last week, they are still quite low.
if the prevailing mortgage rates were lower than the initial interest rate on your loan, you should have got a low rate when your mortgage reset. it has been quite some time since the mortgage reset. did you not ask your lender why the mortgage reset at a higher rate, while the prevailing rates were low?
if you think the interest rate on your loan is quite high, compared to the current mortgage rates, you can look to refinance the loan. given there's enough equity in the property and you qualify for a loan, a refinance will be a good way of taking advantage of the current low rates. though the market rates have increased last week, they are still quite low.
The new rate is based on the index plus the margin.
The index varies weekly or monthly throughout the life of the loan.
The margin is fixed for the life of the loan.
What is your margin?
What is your index? (Libor or Treasury Billor COFI or????)
The index varies weekly or monthly throughout the life of the loan.
The margin is fixed for the life of the loan.
What is your margin?
What is your index? (Libor or Treasury Billor COFI or????)
precisely as john noted, you have to go back to your original documentation and do some research. perhaps your loan was discounted quite a bit when you obtained it and you're paying for that now.
did you have this discussion with your lender?
did you have this discussion with your lender?
I did discuss it with my lender. Originally, the interest rate was 5.25%. I received the loan in 2003. About 2 months before it was due to reset, they sent me a letter stating that the new interest rate would be 4.25%, then sent another letter 2-3 weeks later, stating the first was a mistake and that it would reset at 6.25. Naturally, I was pretty upset and called them about it. They said the interest rate calculated in the first letter was based on the incorrect index. At the time, I was unable to refinance based on the fact that my home had dropped so much in value (I'm in Michigan), unless I was willing to pay a huge chunk of money, which I didn't have. Now, I'm going to try to determine if I qualify for the Obama plan and can modify the loan to a 30yr fixed.
Hi,
Home Affordable Modification Program can help you reduce your monthly payments. If you are facing problem while making payments, this program can help you afford your mortgage. The program aims at bringing your monthly mortgage payments down to 31% of your gross monthly income. However, all the lenders have not participated in this modification program. So, you need to check with your lender if they can offer you the Home Affordable Modification Program.
To know more about this program, you can refer to the following page:
http://www.mortgagefit.com/problems/homeaffordable-modification.html .
Home Affordable Modification Program can help you reduce your monthly payments. If you are facing problem while making payments, this program can help you afford your mortgage. The program aims at bringing your monthly mortgage payments down to 31% of your gross monthly income. However, all the lenders have not participated in this modification program. So, you need to check with your lender if they can offer you the Home Affordable Modification Program.
To know more about this program, you can refer to the following page:
http://www.mortgagefit.com/problems/homeaffordable-modification.html .