Forgotten Your Password?

Need to Register?

Question Icon

How long will the rates remain this low? My option ARM expires in a few months. can i still ride it out?

When I refi, it will get higher than my current rate. by brianpleska from Las Vegas, Nevada. Mar 5th 2010 Reply

Michael Ivanov | Mortgage Loan Officer (GoToLoanGuru)
#3 ranked lender in Nevada - 17 contributions

Brian, Its very difficult to answer your question. A lot of option arms were originated with extremely high margins. Margin was how banks made profit. Your interest rate consists of index + margin. There were several different indices on which the option arm was based on depending on who the investor was. Lender/broker don't have control of the index. The index fluctuates with the market but the margin was set by the lender and/or broker depending on who orginated your loan. When your option arm expires you will only benefit as much as your margin will allow you to. I would recommend you speak to your trusted mortgage advisor to give you a solid answer by reviewing your current mortgage information.

Mar 5th 2010
RJ Baxter (rjbaxter)
#12 ranked lender in Colorado - 5 contributions

There are a lot of difffering opinions about how long rates will remain low, but my opinion is that they are unlikely to go lower than right now. The government's mortgage-backed security purchase program, partially responsible for artificially lowering rates over the past year, is set to expire at the end of this month, and there is a lot of talk that higher rates could follow heading into April.

Mar 5th 2010
Debbi Lachowsky (debbi.lachowsky)
#4 ranked lender in Arkansas - 13 contributions

Although there is no way to know for sure, it's a pretty good assumption based on the mortgage backed securities that the interest rate will start to rise. I would suggest beginning to explore your options of refinancing to a fixed rate by contacting a lender to review your current loan. Depending on your loan to value ratio of your home, a lender will be able to access your current loan and provide you with information on refinancing to a fixed rate, so you will be better able to make an educated decision on whether to continue in your current loan or refinance.

Mar 8th 2010
Subscribe to our news feed.