Hi, question on bailout plan and APR rates you see on yahoo.

Guest 0.10 Dollars($)

Hi, my parents mortgage is defaulting from a fixed rate mortgage to an APR mortgage next year..

They were paying something like 5.xx% and now it is defaulting to the APR..
it is capped where the first year it can only rise up 1% higher tops..on the APR.. and then the following year another 1% and etc etc..

anyways.. I wanted to help them figure out what the new rate is going to be so I see on Yahoo.com they give an average ARM rate of 5.47%

so would that more than likely be the new rate? so in other words it would not change much for them atleast not this first year?????

second questions is..
we have two houses, one is being rented out.. but anways with other bills I know my parents are having a hard time keeping up with everything..

so with this subprime bailout congress deall.. where they say they can freeze initial rates for an addition 2-5 years...

My dad says we don't have a subprime deal.. but I'm thinking what difference does it make? RIGHT if you cant pay your mortgage at a new default rate, do you still qualify?
or is there some crazy criteria u have to meet?

jenkin7 · Joined: 04 Jun 2007 Posts: 939 140.80 Dollars($)

Hello Elliott,

The rate for the ARM will be something around the prevailing rate but it will depend on other conditions like credit score.

If you don't have a subprime rate then you don't qualify for a bail out deal.

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