Posted on: 06th Oct, 2009 10:58 am
greetings,
i just started the 5th year of a 5 year interest only arm. financed on an 85/15/5 (yes, i know, incredibly stupid).
house is now under water by approximately 150k.
i'm getting more and more fearful of interest setting in soon and rates rising and not being able to afford the mortgage.
unfortunately, the mortgage is in the lenders portfolio, and is not a freddie or fannie loan.
my question is this:
is there anything that can be done to refinance or modify the mortgage to get me on a fixed rate so that if interest rates rise i am not completely screwed?
i can theoretically afford to pay principal on the 85 loan, the second is fixed already.
do i have options or am i hosed?
i just started the 5th year of a 5 year interest only arm. financed on an 85/15/5 (yes, i know, incredibly stupid).
house is now under water by approximately 150k.
i'm getting more and more fearful of interest setting in soon and rates rising and not being able to afford the mortgage.
unfortunately, the mortgage is in the lenders portfolio, and is not a freddie or fannie loan.
my question is this:
is there anything that can be done to refinance or modify the mortgage to get me on a fixed rate so that if interest rates rise i am not completely screwed?
i can theoretically afford to pay principal on the 85 loan, the second is fixed already.
do i have options or am i hosed?
Actually, ARMs currently have a lower interest rate than fixed (about 1.5% lower). I would just sit tight and pay the ARM. You cannot sell or refinance anyway, so you don't have much of a choice.
Even with an interest-only ARM you should be able to pay extra. This would be the equivalent of a non-interest-only loan. For instance, I pay $350 extra per month on my interest-only and that is more than a fixed loan would apply to principal this early in the loan.
Even with an interest-only ARM you should be able to pay extra. This would be the equivalent of a non-interest-only loan. For instance, I pay $350 extra per month on my interest-only and that is more than a fixed loan would apply to principal this early in the loan.