This Sunday’s Seattle Times real estate section featured an article on adjustable rate mortgages from The Associated Press, J.W. Elfinstone: http://seattletimes.nwsource.com/html/realestate/2003081961_foreclosures25.html . We find the article a bit on the alarmist side, but it is an important issue for many homeowners. For expert advice on the subject we turn to Ron Delfs at Equity Northwest [425-869-1825], [email@equitynorthwest.com], a long time business associate and mortgage broker extraordinaire, for the proper perspective on this important issue. We highly recommend that you read Ron’s comment below, and/or give Ron a call if you have questions about the current status of your adjustable rate mortgage.
An Adjustable Rate Mortgage (ARM’s) can be a great tool in purchasing or refinancing if you are looking for a short term solution. It is important to have a general understanding of how and when your ARM’s can adjust. ARM’s always have a period of when the rate and payments are fixed, so knowing how long that period is is the most important thing. These periods can range from 1 month to 10 years. After this period is up is when your payments and rate may go up. What your new payment will be depends on the index your ARM is tied to. With most all indexes going up 200-300% over the last 24 months, the rates for the ARM’s are now comparable to fixed rate mortgages. Therefore, if your initial fixed period is coming to an end soon and you are planning to live where you are for a long time, it may be worth looking into a fixed rate mortgage. If you are looking to purchase a home in which you will only live there less than five years or refinance your home and are looking to sell in less than five years, the ARM may be just the right answer.
Ron Delfs, Equity Northwest
Share this Post
Comments 1
An Adjustable Rate Mortgage (ARM’s) can be a great tool in purchasing or refinancing if you are looking for a short term solution. It is important to have a general understanding of how and when your ARM’s can adjust. ARM’s always have a period of when the rate and payments are fixed, so knowing how long that period is is the most important thing. These periods can range from 1 month to 10 years. After this period is up is when your payments and rate may go up. What your new payment will be depends on the index your ARM is tied to. With most all indexes going up 200-300% over the last 24 months, the rates for the ARM’s are now comparable to fixed rate mortgages. Therefore, if your initial fixed period is coming to an end soon and you are planning to live where you are for a long time, it may be worth looking into a fixed rate mortgage. If you are looking to purchase a home in which you will only live there less than five years or refinance your home and are looking to sell in less than five years, the ARM may be just the right answer.