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by Anonymous on September 3rd, 2008

Anonymous

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Help answer this question below.

My apr is at 6.9%. I was originally paying 1200 a month. 3 months ago, my mortgage payment double up but the apr is still the same. How can i resolve this and have my monthly mortgage back where it was?

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  • by Scott D - ex-QnA on October 1st, 2008

    Scott D - ex-QnA

    You probably had agreed to a 2/28 or 3/27 ARM in which case you have passed the portion of the loan which remains fixed and predictable, and entered into the harsh reality of the Adjustable Rate Mortgage to which you had agreed.

    Generally speaking, your base rate of 6.9% can be increased by as much as 3%, depending upon the index it is tracking. Your rate will increase by as much as 1% every six months until the lifetime cap rate is reached, usually 7% above the rate rate.

    These various caps are expressed as 3/1/7, and are associated with a sibprime loan. A conforming ARM usually has caps of 2/2/5 or 5/2/5.

    You may contact your mortgage lender and ask to modify your loan to a fixed rate. If your credit is reasonably good and your income is stable, you may luck out an get a 6.5% to 7% 30-year FRM.

    If you have any new "dings" on credit, be prepared to sell your home or go into foreclosure.

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