How can I figure my ARM rate adjustment with my Caps?

Question

We have a 5 year fixed at 5.25% on the first and 8% fixed on the second. Our first loan amount is $358, 400 and the second is $100,000.

The 1st will adjust in March 2010. The Margin is 2.250. The Periodic Rate Cap is 2.000 and the Lifetime Rate Cap is 6.000.

How can I figure out how much my monthly loan amount is going to be, assuming the interest rate adjusts to the max? And how often will it adjust?

We are not so worried about the second, since it is fixed for 10 years.

Thanks

Answer 1

You could spend your time trying to figure this out, but I'm pretty sure bankrate.com has loan calculators that will do the math for you.
Better yet, just try fixing your credit and refinancing into a fixed rate loan.
If not, you'll wind up like everyone else, filing for a foreclosure because you can no longer afford that house.
You made a BIG mistake going with an adjustable rate, and what's the need for such an expensive house anyway? If you have THAT much income, you'd have been better off paying off your bad debt, getting good credit again, putting the 20% down in order to avoid the PMI and buying a reasonably priced house. Sounds like someone got in a hurry and HAD to have a house NOW. Tsk tsk - you're going to understand very soon why that was a bad idea!

**EDIT** I tried responding to your message but it wouldn't allow me. If you have great credit & haven't made bad decisions (although taking the ARM really wasn't too bright), you're one of the lucky few. Read some of the questions posted here from desperate people either wanting to buy a home with lousy credit, or who had purchased a home with bad credit & are now facing foreclosure because they didn't improve their credit in the several years they had before the interest rate skyrocketed.
I'd still suggest a fixed rate - you can be guaranteed that regardless of your credit, your interest rate will rise the maximum allowed - that's how these lenders make their money. Just a suggestion from someone who has seen it happen one too many times.
P.S. Not a redneck myself, my boyfriend is though. Complete with Dixie horn and everything. Life is great, LOL

Answer 2

If your loan goes up 2% figure an additional $465 a month.
With the lifetime cap o 6% that could add $1502 a month. Here's a calculator that you can figure in all of your specifics

http://cgi.money.cnn.com/tools/mortgagecalc/

Answer 3

That will be one nasty calculation and very complicated with so many variables .
I'm getting just under $3200 , but I think it's way off .
That was just PI , not taxes & insurance too .

2 loans that amount to a jumbo with rates approaching credit card is sooooo extreme . . .
(But you must have at least $200K income to cover it so I'm sure it is no biggie)

But for that calc , I suggest you ask the lender for a printout of the tables of the possible payments .

Unless that new Rolls Royce he's buying on your payments has him too distracted !

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