What should you do if you currently have an ARM?
If you have an ARM (Adjustable Rate Mortgage) and it will be adjusting in the next few months chances are, if you took out this loan 2 or 3 years ago, the rate will adjust higher. Therefore it could be time to look into locking into a long term fixed rate loan. You can save yourself a great deal of money per month by locking into a fixed rate payment.
To find out what your adjusted rate will be you will have to look through the paperwork you obtained at the closing of that loan. You will find the ‘margin’ and ‘index’ the rate will be based off of. The ‘margin’ is fixed from the start of the loan. The index is what will have changed since then. Once you add the index and margin together that will be your new rate, compare it to current fixed rates and make a decision.
