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View Diary: Seismic mortgage market event today (80 comments)

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  •  I'm not quite sure I understand your update (4+ / 0-)
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    Ray Radlein, theran, The Termite, 3goldens

    remark, and mind you I wouldn't think you'd be under any obligation to provide investment advice not paid for here. Still, you got my attention because, as it happens, I do hold a hybrid ARM and have been looking to refinance before the rate begins adjusting.

    Now my situation is fairly secure in that 1) I live in San Francisco where values are holding fairly steady so far, 2) my home is still worth quite a bit more than I paid for it in 2003 and--because I refinanced six months after closing to get a lower rate, my loan won't start adjusting until next year, 3) my employment situation is extraordinarily secure, 4) I have no other debt at all and 5) at this point, based on the index and spread in my current loan, the new rate would be lower than anything I might find in terms of new financing. (45-day average of the 1-year treasury note yield rate plus 2.75% equates to around 5% right now or even a bit less, and I don't see anything available remotely as favorable in terms of new financing, so even though I'd be stuck with my higher principal, at this point refinancing doesn't even technically make sense other than to provide predictability)

    But still, I'm not quite clear on why you said what you did. Could you clarify just a bit?

    •  You should be fine (3+ / 0-)
      Recommended by:
      Ray Radlein, theran, 3goldens

      To clarify, many people do have hybrid ARMs who intend to live in their homes longer than the fixed period.  Which means they'll eventually have a few choices.  They can:

      - Adjust to floating when their 3,5,7 or 10 years are up, and risk higher payments.

      - Refinance into another loan on or before their adjustment date.

      One of the options for refinancing that is very popular with that crowd just evaporated.  All that said, you should be able based on your circumstances to get into a 30-year fixed that gives yo a payment that's within your budget.

      "Some folks look for answers...others look for fights."

      by The Termite on Thu Mar 06, 2008 at 12:50:02 PM PST

      [ Parent ]

      •  Thanks! (3+ / 0-)
        Recommended by:
        Ray Radlein, theran, The Termite

        I really hadn't planned on refinancing with another five-year ARM; it hadn't made much sense for quite a while.

        I DO happen to have a HELOC (pretty typical for the sort of financing available to me when I bought) and, with the temporary increase in the conforming loan limit--which I'd otherwise exceed by about 20k--I have been thinking of combining the two. But we'll see.

        In the end, I may STILL decide to do nothing.

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