at 11.5% I can no longer afford my mortgage pymt. I thought it could only go up when the average rate rose. mine is going up every so many mnths. when they can raise it. how do I get away or I'll lose my home. can't believe I got myself into this mess. where can I turn for assistance?
2007-03-10 16:04:14 · 7 answers · asked by billhdrk 1 in Business & Finance ➔ Renting & Real Estate
Why can't you refinance? Is your credit SO bad you can't refinance? If you are in Georgia, PLEASE contact me as soon as possible. Those adjustable rate mortgages are only band-aids until you get your score up to get a 30 year fixed.
2007-03-10 16:26:47 · answer #1 · answered by healthspot_2000 4 · 0⤊ 1⤋
Your predicament is not unlike the 1.7 trillion in adjustable Rates for 2007. Many (as seen nation-wide) are experiencing rate adjustments as high as 3% first adjustment with subsequent 1% there-after every six months.The bad news is that these borrowers like you were never educated. Pretty much 98% of the loan officers or brokers that are screaming to help and denouncing ARMS as terrible or band-aid loans, are the same individuals that originated 2.6 trillion dollars in ARMS, yet never took the time to explain to their clients what could happen. ARMS are not bad if you understand them, and manage them.
There is no such thing as an avg rate unfortunately. Your rate is tied to one of two primary indexes; LIBOR or the Treasury. Since you are adjusting to 11.5% I'll assume you're on the LIBOR. Here is an example of how it works: Loan closes at say 7% fixed for 2 years, well the lender has what’s called a margin and along with the margin (lender based) you add the index (LIBOR Or T) lets say the lender had a margin of 5.0 plus LIBOR of say 2.0 equaling 7.0 or what’s know as the FIR or Fully indexed rate. If LIBOR stays the same during the holding period, you'll remain at 7.0% but if LIBOR changes, which it has you'll adjust with it. So LIBOR's at 2.0% when you closed back when, but now it's at 5.4. So your FIR is 10.54 and yes you can potentially adjust from 7-10% the first adjustment.
Most lenders have max adjustment of 3% over the start rate or AKA Cap. Subsequent adjustments will be capped at 1% every six months (LIBOR is 1 mo. 6 mo, and 12mo.) Most subprime lenders use the 6 mo. Libor Index. Their is also what is know as Ceiling, this is the highest rate your loan can adjust to period.. 3/1/6 = 3% adjustment/ 1% thereafter every 6mo/ max 6% lifetime.
What can you do now? Well an earlier poster mentioned a good (assumed) website to assist borrowers (although a bit confused in their terminolgy of APR rate); I'm not familiar with that program, but because of the wide-spread harm that can befall the lenders, borrowers and our economy due to the amount of potential foreclosures, many borrower advocates have stepped up. HUD has some great information, and additionally many lenders are working with borrowers to put them in better loan programs or defer the adjustments for a bit. My advise would be to look at your lender and see if they offer any options, especially if your are not able to re-finance due to credit challenges. I'd also speak to a local broker...key word is local. You'll want to sit face to face and go over any options that he/she may have. They may have to put you in other subprime loan for a bit, but the rate should still be better than what you have today. Also, have them DU or LP you. Mention those terms and they'll know what they are, both Fannie Mae and Freddie Mac have done some remarkable things lately.
Good Luck! I truly hope that you get through this.
2007-03-11 04:00:28 · answer #2 · answered by Nyte M 2 · 0⤊ 0⤋
Contact a reputable mortgage broker. A broker--- not a bank. Brokers get your info and then have many many banks they use to find you a good rate. Different banks specialize in different types of applicants, and nowadays there are banks who will work with almost anybody.
If you can make it work, get a fixed-rate loan this time. As you can see, those ARMs can make life very difficult when they raise the rates.
Good luck to you. Talk to your friends and find a good broker. Whatever you do, do not make a mortgage payment more than 30 days late. If you get a 30-day late mortgage payment on your credit you will seriously hinder your ability to refinance. Beg from your parents if you have to, but do not fall behind on the current mortgage.
2007-03-11 03:17:02 · answer #3 · answered by axaroth 3 · 0⤊ 0⤋
contact www.naca.com
they are a non-profit housing advocacy group that does some of their own financing.
I think a lot of people are in your situation--squeezed out by skyrocketing APR rates. You are right-- 11.5% is nowhere near the going rate. Do you have any equity in the house? Can you refinance and get a fixed rate loan?
2007-03-11 00:09:56 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Depending on your credit and loan to value ratio on your home, I would refinance at a lower fixed rate. You can get more information on this subject at http://www.mortgageawareness.com
2007-03-11 00:13:00 · answer #5 · answered by Anonymous · 0⤊ 1⤋
REFINANCE!!!!!! Rates are still low, get into something fixed!
2007-03-11 00:23:29 · answer #6 · answered by mammamia 3 · 0⤊ 0⤋
refinance
2007-03-11 20:27:09 · answer #7 · answered by CALIFORNIA GOLD 3 · 0⤊ 0⤋