And..explain ARM to me

ddelo23

I was looking into the ING 5 year - it seems to work for us, but i don't see anywhere how long we have to remain in the house - is it one year before we can sell?

mrs.marie.g

I think the rules on the arm have changed. arms SCARE me. thats why a lot of people are in the situation they are in because of arm's. and the rates ballooned and people who thought they'd be out are not.

our friend bought her townhouse an arm and is WAYYYYYYYYYYYYYYYYYYYYYYYYYYY under water and they cannot sell it

jessNdean

an arm mortgage is just an adjustable rate mortgage.  we had that on our house in Florida.  it locks you into a rate for 4 years then spikes after that.  with an arm morg we were able to do a loan modification to bring down the rate of the mortgage and it locked it in for 4 years...

example

when we got our mortgage 6 years ago.  we were at 6 1/2 percent. after 4 years it spiked to 9 percent it was crazy but after that it doesnt' jump that high. then we did a loan mod and got it back down to 6.  i know those are high percentages but thats what was available to use back then.

ddelo23

jessNdean:

an arm mortgage is just an adjustable rate mortgage.  we had that on our house in Florida.  it locks you into a rate for 4 years then spikes after that.  with an arm morg we were able to do a loan modification to bring down the rate of the mortgage and it locked it in for 4 years...

example

when we got our mortgage 6 years ago.  we were at 6 1/2 percent. after 4 years it spiked to 9 percent it was crazy but after that it doesnt' jump that high. then we did a loan mod and got it back down to 6.  i know those are high percentages but thats what was available to use back then.

But do you have to remain in your house for a specific period of time?  Like, if i was able to sell in 6 months, would I be penalized?

mrs.marie.g

ddelo23:

jessNdean:

an arm mortgage is just an adjustable rate mortgage.  we had that on our house in Florida.  it locks you into a rate for 4 years then spikes after that.  with an arm morg we were able to do a loan modification to bring down the rate of the mortgage and it locked it in for 4 years...

example

when we got our mortgage 6 years ago.  we were at 6 1/2 percent. after 4 years it spiked to 9 percent it was crazy but after that it doesnt' jump that high. then we did a loan mod and got it back down to 6.  i know those are high percentages but thats what was available to use back then.

But do you have to remain in your house for a specific period of time?  Like, if i was able to sell in 6 months, would I be penalized?

like capital gains? i don't think so

jessNdean

I dont think so. We went through a short sale though for us to relocate back to NJ. there was no issue with us selling it having an ARM ...that just locks your interest rate in.  It wouldn't have mattered how long i held onto that house...we were underwater completely.  We paide 260 we sold for 107. SUCKS! I dont think you are locked in for a certain amount of time before you can sell.  If you can sell you sell. I wouldn't be saying that you are looking to sell. i would just explain that you are looking into ways to lower your interest amount even by considering an ARM mortgage. I would definitely NOT go with a ARM if you weren't going to sell.  It wouldn't be worth it.  Just make sure someone explains to you  but no i dont think there is any issue with selling the house having an arm.  (again i could be wrong)

the.truth.hurts

No, I have an ING 5-year ARM and there is no prepayment penalty, or at least there wasn't when I did it.  I refinanced from a traditional 30-year fixed to the 5-year ING ARM for very little money, and the best part, they offer a "rate renewal" where you can lower your rate and reset the 5-year clock for just the cost of one mortgage payment.  I now have a 2.625% rate!  

Sandy&Lui

ARM is Adjustable rates. You can get a fixed 5 year arm at a low rate then after 5 years it got to the rate that is at that time. I got screwed with it.

jessNdean

i got a 4 year not 5 but maybe thats how it is now. as i'm reading from pp's.  i just wouldn't do it if i weren't selling. but thats me. 

Kristen81603

mrs.marie.g:

I think the rules on the arm have changed. arms SCARE me. thats why a lot of people are in the situation they are in because of arm's. and the rates ballooned and people who thought they'd be out are not.

our friend bought her townhouse an arm and is WAYYYYYYYYYYYYYYYYYYYYYYYYYYY under water and they cannot sell it

this is not true- and a common misconception-

rates ballooned because people did interest only mortgages not arms- an arm is regulated and are good depending on your needs- arms can only adjust a certain amount and cap at a certain amount- now if someone got a crappy arm that can happen, but this is not the reason peoples payments ballooned. Especially since interest rates have been very low since most people's arms would be resetting. 

Kristen81603

Sandy&Lui:

ARM is Adjustable rates. You can get a fixed 5 year arm at a low rate then after 5 years it got to the rate that is at that time. I got screwed with it.

your rates have gone up? we had a 7/1 arm and it has never jumped and it can only jump by 1% point each year- at cap- - very interesting- Mike was sure that we got good arm terms and we have never had an issue- for example if our rate is 4% and rates jump we can only jump to 5% and cap at like 7% lifetime-