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Use an Online Mortgage Calculator to Understand ARMs
from:Adjustable rate mortgages still exist, even with the bad rap they’ve received from the mortgage crisis. They are a specialty product that were not meant to be used by everyone, just by a few people who might benefit from the adjustable rate. People who weren’t planning on spending more than five year’s in their home or people who had income that was rising were the traditional buyers of ARM loans. The reasons for this are that the loans adjustable terms are difficult to assess unless you have done your research with an online mortgage calculator. If you don’t know what you are signing with an ARM loan, you shouldn’t get this type of loan.
Get the Facts
There isn’t just one type of adjustable rate mortgage, so you will need to understand the product you are investigating before you plug any numbers into a mortgage calculator. You will need to know how long the initial payment is fixed and when and how often the rate is adjusted. For instance, in a 3/1 adjustable rate mortgage, you might have a period of three years and then it adjusts every year thereafter. There are also 5/1, 7/1, and 10/1 ARMs. There are also hybrid mortgages and ARMs that are tied to different indexes. This can make understanding the product you have a bit more complex. Try to get a good idea whether you are dealing with a classic ARM or whether this is a hybrid product. Also, make sure you know how long the initial rate lasts as some offer teaser interest rates that quickly fly by, some in less than a year.
You will also want to know if the adjustments are capped, so that they cannot go past a certain amount. This is very important to be able to see your best and worst case scenarios with a mortgage calculator. The caps are usually set as a percentage of the previous payment amount or sometimes as an interest rate hike cap. The thing to understand is that even though the interest rate increase may be capped the first year, and nothing happens to adjust the rate the following year, you may still be charged an increase from the previous year’s cap. It’s because the lender assumes you owe and they cut you a break on the previous year. This means that you won’t really be able to figure out exactly what you owe each year on the mortgage calculator, but you can get a best case and worst case scenario from the mortgage calculator.
Refinance Mortgage Specific links
Refinance Mortgage News
Time to Refinance While Mortgage Rates are So Low - FreeRateUpdate.com
 Eastern Morning Herald | Time to Refinance While Mortgage Rates are So Low FreeRateUpdate.com After taking a look at these details, many borrowers are going to find that it is time to refinance while mortgage rates are so low even if they refinanced several years ago. For those with adjustable mortgage rates, it is the perfect time to switch to ... Mortgage applications up on refi demand: MBA MBA Weekly Survey: Refinance Applications Increase Because of Record Low ... Record-low mortgage rates spur refinancing |
LendingTree Analysis Indicates Greater Savings with Adjustable-Rate Mortgages ... - MarketWatch (press release)
LendingTree Analysis Indicates Greater Savings with Adjustable-Rate Mortgages ... MarketWatch (press release) With Adjustable Rate Mortgages (ARM) representing only about 7% of new loan originations in the market, many consumers are seemingly unaware that these adjustable rate loans are worth a second look. As refinance volume has increased year over year, ... |
Refinancing homeowners overwhelmingly choose fixed loans - e-wisdom.com
 e-wisdom.com | Refinancing homeowners overwhelmingly choose fixed loans e-wisdom.com By Max Thompson A great majority of homeowners who opted to refinance in the first quarter (Q1) of 2012 choose fixed-rate mortgages over adjustable-rate mortgages for their new loan, Freddie Mac revealed in a recent report. According to Freddie Mac, ... Freddie Mac Repurchase Policy Is MBS Investors' Latest Worry Investors,Analysts Don't All See Benefits In Single Agency MBS |
Borrowers Face Big Delays in Refinancing Mortgages - Wall Street Journal
 Wall Street Journal | Borrowers Face Big Delays in Refinancing Mortgages Wall Street Journal By NICK TIMIRAOS And RUTH SIMON When Craig Foyer called Bank of America Corp. in March to ask about refinancing the mortgage on his Oconomowoc, Wis., home, a saleswoman told him the company was "swamped with business" and that it would call him back in ... 79 Percent of Refinancing Homeowners Maintain or Reduce Mortgage Debt in First ... Mortgage applications gained last week: MBA Why You Might Never Want to Pay Your Mortgage Off |
How 7 REITs Could See A Buying Frenzy Soon - Seeking Alpha
How 7 REITs Could See A Buying Frenzy Soon Seeking Alpha Politics could be what will make or break mortgage REIT stock values in the near future. Any successful federal effort to help large amounts of underwater homeowners refinance would increase business and profits for REITs that specialize in ... |