Is your ARM going to cost you a LEG?

Is your ARM going to cost you a LEG?

It has been reported that 2010 and 2012 are going to see a lot of mortgages re-adjust. If you have an ARM (adjustable rate mortgage) and it will be adjusting this year it is most likely going to rise. In this economy many homeowners are going to find themselves in a situation where they will no longer be able to meet their mortgage payment obligations. As a homeowner you do have some options to head off this type situation happening to you.

If at all possible look into refinancing, if your credit is good and you have been in your home any reasonable amount of time you could have a good chance to get into a 30 year fixed rate mortgage at a good rate.

Check with FHA for information on programs like FHASecure. This program works well for homeowners that owe more on their mortgage than the home can be sold for. The homeowner can refinance into an FHA loan and the current lender forgives mortgage commitments that are over 90% of a current appraisal.

DO NOT be afraid to contact your lender, many lenders are willing to restructure your payments in order to keep you in your home and avoid the house going into foreclosure, putting the lender in an REO (real estate owned) situation.

Other sites to check out for help and advice include HUD, and Hopenow

If you have an ARM that going to be re-adjusting in the near future it is extremely important to address the situation before it becomes an issue.