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Guest

I'm in a similar situation to Mary. I have a 5/1 ARM at 5.375% that will readjust in March 2010. It will readjust to 1 year LIBOR + 2.25. And if I'm reading the loan docs correctly, it will adjust and then that rate will hold for the next 12 months before it adjusts again. I'm watching the forecasts closely and hoping my payments might actually come down too.

gmakerley · Posted: Thu Jul 16, 2009 11:01 am Post subject:

libor index today is 1.509, so fully indexed rate today would be 3.759. obviously, things are going to change between now and next spring, but if we had to state expectations based on what we know now, it seems that rates won't be climbing any time too soon.

Jimmymackin · Joined: 17 Aug 2009 Posts: 66 0.65 Dollars($)

George,

I follow MND and from what some of the tech experts are saying, interest are bound to increase when the treasury stops buying MBS in October...what is your opinion on that?

bensonclive · Joined: 16 Aug 2009 Posts: 90 -0.12 Dollars($)

If treasury stops buying MBS then what could be the possible security? Do you have the answers for that for the time being? One of the safest security is fixed deposits, but how many guys are going to provide Fixed deposits worth the value (at least half of that) of the home but I do not think that it is feasible for the treasury to go for complete negation of the MBS.

MBS are going to stay there but their dependency or their ratings will surely affect in coming future but it will not stop altogether.

gmakerley · Posted: Sat Aug 22, 2009 8:04 am Post subject:

i don't stay on top of the markets myself, to know who buys what and when and why, so i really can't comment on this last topic. somebody is bound to be buying mortgage-backed securities at some point.

bensonclive · Joined: 16 Aug 2009 Posts: 90 -0.12 Dollars($)

george thats what is really persistent.One can not deny that mortgage backed securities because this is one of the best security available in general.

gmakerley · Posted: Mon Aug 24, 2009 7:20 am Post subject:

i wouldn't dare to say that something is "one of the best security" available - i might have in an earlier incarnation, but we've seen too much go awry in markets in the past year or two. who - i wish someone had an answer - could have foreseen the outright crash of 401(K) plans? i am not a seer, a soothsayer, a prophet, an oracle, and don't anticipate that changing any time soon.

if you have some particular insight into finances, bensonclive, please share that with this community, so that at least this little tiny part of the globe can enrich itself.

Guest

If your Home Mortgage Loan is about to adjust and you have equity, right now is the best time to lock in a 30Yr Fixed Loan. Talk to your Loan Officer today.

Kal Patel
Voyage Home Loans

gmakerley · Posted: Tue Oct 06, 2009 1:45 pm Post subject:

i can't disagree with that kal. rates are extremely good (worse today than yesterday, though; worse yesterday than on friday as well, but nonetheless still qualify for that extremely good description above.

Guest

This white paper is not took into consideration how much one is paying in total (interest + principal) it took only interest into calculation. If you take the total money paid at the end of 15 years 5/1 ARM route one would paid a total of 497,129 (which includes 9000 closing costs) and 30 year fixed one would paid a total of 542,596. So there is difference 45,467 in total payment. Principal at the end of 15th year differs in these two routes by 43,857. So 5/1ARM in this case saving about 1610.

gmakerley · Posted: Mon Aug 16, 2010 4:29 pm Post subject:

How are you calculating? Are you assuming that the adjustable rate will never change? Obviously so....adjustable rates are just that...adjustable. They will change periodically - not necessarily each time an anniversary hits, but often enough.

Guest

I took the assumptions from the white paper that the ARM rate remain same at 5.75 and 30 year fixed remain at 6%. White paper concluded that even with this after 15 years you pay more using ARM. All I am saying is that is not correct.

You are right about rates changing for ARM. And it can go anyway. Rates for 5/1 ARM went down recently. But can go up easily in coming years.

gmakerley · Posted: Tue Aug 17, 2010 3:02 pm Post subject:

I wouldn't dare to try to predict how an adjustable rate would do 10-15-20 years down the road.

Guest

4/1/04 5/1 arm 1 year libor +2.25 rate was 4.75
4/1/09 rate now 4.00; 4/1/10 rate now 3.125. It looks like it will hold or go down? Just wanted to share some facts. We did look into a refi in '09 5.15 30 fixed. We are glad we held. We also have been taking the opportunity to pay down the principle.

gmakerley · Posted: Tue Dec 28, 2010 9:35 am Post subject:

G&D, I also benefited from having a 5/1 ARM, which I took in 2004 also...I started at 4.5% and it adjusted to 4.25% in the fifth year (now I feel bad seeing your 3.125%), but I'm still satisfied.

In my years of homeownership, I've had two variable rate loans. One was for a home I purchased in 1996 on a 1-year adjustable rate loan. At no time did I suffer with that loan. The rate did go up once or twice, but it also went down once or twice, and overall I had very favorable results. I sold that house in 2005. My current home, as noted above, which was bought with an ARM, hasn't hurt me financially. The biggest problem in homeownership these days in terms of cost (at least around here) is property taxes, which do nothing but escalate.

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Take out 30 year FRM or go on Refinancing 5/1 year ARM?