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What To Do If You Have An Adjustable Rate Mortgage
Right now there are mortgage borrowers with adjustable rate mortgages (ARMs) on which the rate has adjusted within recent years are currently enjoying extremely low interest rates.
 
This is a reflection of the unusually low levels of the rate indexes used by most ARMs. But of course the flip side of the equation is that adjustable rate loans are just that, adjustable and with interest rates expected to rise, the question for many borrowers is how long to stay in arm loan in the current market.
 
The first thing to understand is that ARM loans are based on indexes, such as the one year Treasury for instance plus a certain percentage called a margin.  Right now, with that index being below 1% and many borrowers margin between 2% and 3%, the interest rates that borrowers with ARM loans are paying are still below that of regular fixed rate loans in the marketplace.
 
However, over time, history tells us that the US Treasury and other Indexes will not remain low and interest rates in general will move higher. The process will of course occur over a period of time, which creates an opportunity for ARM borrowers to wait ... more

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