It was a great choice for many people years ago, the Adjustable Rate Mortgage (ARM) loan seemed to be a great choice...Our optimistic approach told us to do so, "anyways in 3 years, when the rate increase, we will be in better financial conditions and refinancing would be an option"... Does this sound familiar? I've heard this many times a couple years ago when I moved to Houston from Florida. Houston house prices are extremely affordable compare to other cities in the country, an ARM was a good choice at that time. It was very popular then, especially in new construction homes of our booming Northwest Houston area. Time is clicking and an inevitable increase knock the doors of an estimate of 1.8 millions U.S homeowners, according to the Federal Reserve.

However, there is HOPE! The Loan Modification approved by the Bush administration last December, freezes the interest rate for 5 years of those homeowners that can afford the existing rate and are current with their payments. If you are among this group, it is important to contact your lender and find out if you qualify for this modification. Your lender will send you a "Loan Modification Agreement" that needs to be notarized by all borrowers and returned back to them for final approval and execution. If you know someone who needs guidance, let them know that there is something they can do about the ARMs without having to sale their home, it's called "Loan Modification".

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