The recent bank troubles have hurt the budgets of many homeowners with adjustable rate mortgages.

An adjustable rate mortgage is a mortgage for which the interest rate remains fixed for a period of time, after which it can change based upon a predetermined rule.

Since 2003, most ARMs have been based on the LIBOR which has increased abnormally 2 percent since September.

LIBOR is the interest rate which banks lend money to each other and as banks are getting hit hard, they are raising LIBOR. Since the failure of Lehman Brothers, the LIBOR is up nearly 40 percent.

This means that a home loan for $300,000 would cost an additional $2,500 from a household budget over a year.

There is good news!

For those who qualify, mortgage rates on new conforming loans are lower than what an adjustable rate mortgage would be at this point. It may be the time to look into refinancing into a new fixed mortgage rather than letting your current mortgage adjust.

To learn more contact me directly at 678.648.5626 or dwalters@integritymtgonline.com

Image source: The Wall Street Journal