Well to tell you the truth, nothing. If you know you have one and you know what is happening with your ARM. I personally have an ARM on my primary residence and yes it's interest only. Ooooo, Taboo!
Not really. The problem isn't having an ARM, it't the reason for having one that's the problem. I opted to take out my mortgage as an ARM because of the strategy I had behind it. My strategy, was and still is, to only make interst payments on my mortgage and to apply the difference in payment into an asset accumulation vehicle to build wealth. You see, my strategy is to build wealth and let me money work for me rather than having it sit lazily and idlely in my home as "equity".
The myth about equity is that is grows for you. WRONG!! The house is the asset that appreciates over time, while your money sits there unable to do anything for you. I know this because I've bought several homes with no money down and they have appreciated in value, with out ANY money inside them.
That's only one strategy that can help families to pay off their mortgage faster and in a safer way.
The problem with ARM's. The problem is two fold. The loan officer did a poor job or even unethical job explaining that their client was mortgaging their home with an ARM when they thought the rate was fixed. The other problem is when the consumer tried to purchase a home that was out of their price league from the on set. That goes along with the "buy now" pay later mentality so previlent these days...and boy will they pay. There's nothing like a foreclosure on your credit report to keep reminding you about over extending yourself.
What can someone do if they're in either of those situations? Good, news is that rates are relatively low and depending on your strategy, I have a really creative program to help families get themselves unstuck per se. This isn't for everyone. It's for those that haven't already been late on their mortgage payments.
The best thing would be to go to my site, www.treasuretomorrow.com and ask for a MAP, a Mortgage Asset Plan. This is a detailed plan to help you see what your options are.
The next best thing, if you're not ready to refinance, would be to register your mortgage with us under our Mortgage Adoption Program. We will monitor your mortgage and notify when rates dip if they do before your ARM makes its adjustment.