Santa Clara County  (408) 252-7334 Sacramento County  (916) 705-2630

Licensed by the CA Dept. of Real Estate. License #00904833 Real Estate Broker (408) 252-7334 (916) 705-2630

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Am I safe in my current Adjustable Rate Mortgage (ARM)?

seerates.com Interest Rate Reduction Center

Most ARM's are set to adjust to the maximum limits allowable by the original terms of the note (usually the index + the margin).

What will my interest rate adjust to?

The FED has increased short term interest rates 17 time since 2004.  Unfortunately most ARM's are based on Short Term interest rates.  (see chart below for estimated rate adjustments)

What do you recommend I do with my current ARM?

If your ARM is scheduled for an adjustment within the next  12  months I recommend locking into a new loan that will remain fixed for at least the next five years.

Current ARM Index

N/A

2.969%

2.160%

To calculate your next ARM Interest Rate Adjustment  choose an ARM Index (above green) and add your margin (most margins are between 2.25% and 3.0%).

Most  3, 5 and 7 year ARM's use the Treasury or LIBOR index.  (Estimate above & example below based on  index + 2.50% margin)

*Estimated ARM Interest Rate Adjustment

This page was last updated on: June 24, 2008

* Many ARM programs have maximum annual rate adjustment caps.  Please see your original loan agreement for actual adjustment details.

4.660%

5.469%

N/A

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Example of a typical adjustment

Example is a $500,000. 5 yr LIBOR ARM fixed at 5.75% with an interest only payment of $2,395.  The adjustment date is set for 02/01/2008 at that time the loan rate will adjust to approx. 7.162% with a new P&I monthly payment of $3,585..  Are you ready for a 50% increase in your monthly mortgage payment?