Resetting, ARMs, Interest-Only, Loans
August 10th, 2014
| News and Tips!
Courtesy Consumer Information – Our Commitment to Serve You!
Tick – Tock... Do you have a Mortgage Time-Bomb?
- Over one trillion dollars of HYBRID MORTGAGES were closed within the last ten years, and many are still due to reset and raise your monthly payment!
- The definition of a HYBRID MORTGAGE is that they are not fixed for the full term of the mortgage, but only for an initial period of time. Then they change! Examples are ARMS, INTEREST ONLY and other Nontraditional Mortgages...all of which can cause your monthly Principal and Interest payment to increase considerably after the initial fixed period.
- Adjustable Rate Mortgages (ARMS) provide low initial rate ("teaser rates") which adjusts to a higher rate which results in higher monthly mortgage payments.
- Here's an example - For a homeowner with a 5-year ARM ( an adjustable rate loan with an initial fixed rate for five years that then adjusts) When it "resets," the adjustment could add one or two percentage points to the initial interest rate.
- Many homeowners having Hybrid Mortgages are not fully aware that their mortgage payments are due to reset as well as the impact such "resetting" would have for them.
Steps to Take Before Your "Reset" Date!
- Start now to learn your options and become aware of the terms of your current loan.
- Review your credit report for accuracy; it takes about 40 days to have any errors corrected. One out of every four credit report is incorrect.
- Review your loan documents you received at the closing of your loan. Many of these types of loans have prepayment penalties.
- Follow the recent sales of homes in your area as the selling price of them will affect the appraisal of your property when you do a refinance.
- Call 1 STOP MORTGAGE and we will answer any questions and give a full free analysis of your choices before the mortgage rate resets. We are here to help!