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Question about my 5/1 arm mortgage.
Posted on 8/4/11 at 3:31 pm
Posted on 8/4/11 at 3:31 pm
So I am almost 5 yrs into my 5/1 arm home mortgage loan. At the end of 5 yrs, what rate will the mortgage adjust to? For example, what would the rate be today?
Posted on 8/4/11 at 3:39 pm to siliconvalleytiger
There is language in your loan docs as to how many points the rate can go up annually and then how many it can go up over the life of the loan. Expect it to go up the max that is allowed.
Posted on 8/4/11 at 3:41 pm to siliconvalleytiger
Check your loan docs. It's usually something like the 1 year LIBOR plus a fixed % (probably in the 2-2.25% range).
I have a neighbor with a 5/1 ARM and is last two rate adjustments were 3.25% and 3.00%. He was at 5% for the intial 5 year period.
The previous poster's assertion that the rate will jump to the max is patently false. Depending on rates during your adjustment period it may go down or up.
I have a neighbor with a 5/1 ARM and is last two rate adjustments were 3.25% and 3.00%. He was at 5% for the intial 5 year period.
The previous poster's assertion that the rate will jump to the max is patently false. Depending on rates during your adjustment period it may go down or up.
This post was edited on 8/4/11 at 3:49 pm
Posted on 8/6/11 at 10:03 pm to siliconvalleytiger
Your new rate will be the current index rate, which may be the LIBOR, plus the margin. However, you may have a floor which it cannot go below as well as a ceiling that it cannot go above.
As stated earlier, most of the conforming ARMs have low margins and are adjusting downwards from their initial rates. That may be about to change, who knows how the markets will react Monday morning.
As stated earlier, most of the conforming ARMs have low margins and are adjusting downwards from their initial rates. That may be about to change, who knows how the markets will react Monday morning.
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