Adjustable Rate Mortgage Getting More Bad Press... For Good Reason?
The Greater Baton Rouge Business Report reported that "People who finance their homes with ARMs may not realize the risks involved and often find themselves in serious financial situations as a result."
The article cites a few cases with relatively small loan amounts of $85,000 and the customer getting a 30% jump in mortgage payments which forced her to get a second job just to make ends meet. My concern is that in places like California, New York and Florida many more people have these loans and they are even less prepared for significant 50% - 75% increases in monthly payments.
We have created a few different mortgage calculators where you can get an idea of what to expect at your first adjustment based on the type of loan you have.
Many of these article point out that the consumer was unaware that such a big jump was coming... if you are one of these consumers, please share you story with us.