Adjustable Rate Mortgage Loans

March 7, 2011 - PRLog -- We Buy Houses Fast - Somerville TX: A few years ago there were mortgages sold to just about anyone who wanted one. The criterion for many lenders was that the borrower wanted a loan and had a house in mind that he wanted to buy. Loans were given that borrowers didn’t necessarily realize they would never be able to keep up with, thereby ending in eventual foreclosure.

One of the ways that loans were written for many people who didn’t have adequate income, or had excessive debt or credit problems, was to give them an ARM loan. ARM stands for adjustable rate mortgage. That means that even if they could afford the monthly payments when the loan was originally written, the interest rates would reset after a number of years, changing the payment they must come up with every month or risk losing the house.

Those loans were written in 5, 3, and 2 year rate adjustments and most were based on a 30 year period. That means the mortgage payment would stay the same for just that many years, and then take on an unstable characteristic, changing with the interest rates. Does this sound familiar? If you started out paying $1500 a month or so, but after a few years your loan interest rate was to reset and went up a percentage point or two, your new mortgage payment would be somewhere between $200 and $400 more every month.

That would continue on until the interest rates reset again, once again changing the mortgage payment. Since interest rates are not likely to go down, but are very likely to rise, your mortgage payments will become difficult or impossible for you to keep up with. You can take another job to make up the difference if you want to keep the house, but with jobs in such short supply you will be lucky to keep the one job you have, let alone secure another job. What happens when your payments exceed what you can pay?

One solution might be to try refinancing. Contact your lender, if they are still in business, and see if you can change your mortgage type to a fixed rate mortgage. That way you will have no doubt about how much your payments will be every month for the rest of the life of your loan. If you would like to sell the house and get out from under the whole situation, try calling a real estate investor to buy your home from you.

Your Texas Home Buyers is a real estate investment company in Fort Worth and the surrounding suburbs of Tarrant County Texas.  Your Texas Home Buyers was established by John Pribble, a ten year veteran in the investing world as well as a Real Estate Broker.  Our expertise in the real estate business has been fine tuned through hundreds of transactions.  We deal with houses in all price ranges, both ugly and pretty, in all areas. http://www.YourTexasHomeBuyers.com

Contact us today at YourTexasHomeBuyers to sell your house fast! http://www.YourTexasHomeBuyers.com

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Your Texas Home Buyers http://www.YourTexasHomeBuyers.com, is a real estate investment company in Fort Worth and the surrounding suburbs of Tarrant County Texas. We Buy Houses in all areas Fort Worth Texas area.