what is a 5/1 ARM mortgage loan?

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its now been 3 years into the 5/1 arm…Our monthly mortgage payment is $ 792 thats including our escrow……..MY QUESTION IS
How much will our monthly Mortgage be after the five years is up???
Based on todays interest Rates?????
Note: Our house is worth about $ 284,000 and we have about $ 179,000 in Equity>
Note> Our principal balance is $ 99,000.

  1. Reply
    Wayne Z
    February 24, 2011 at 12:34 am

    The interest rate is fixed for the first 5 years and then adjusts every year after that (up or down).

  2. Reply
    February 24, 2011 at 12:46 am

    A market, related to several profitable or even residential properties, a slight increase in prices of the property doesn’t correspond to average income of a set of people who are interested to purchase it in particular. How many cases have you seen wherein people run short of money to meet the down payment charges?


    I have heard of quite a few mortgage companies who’d like the applicants to disburse a smaller amount as a down payment at least 5% of the total cost, plus the closing cost charges. Still it is not a pragmatic hope and thus several property buyers pick out no money down mortgage loan since the companies I’ve heard of are barely visible prominently.

  3. Reply
    February 24, 2011 at 1:45 am

    5 year fixed, 1 year adjusted.

    Pretty bad bet right now…

  4. Reply
    Quicken Loans
    February 24, 2011 at 1:56 am

    HI Jennifer U,

    In a 5/1 ARM interest rates are fixed for a period of five years. After the fixed rate period, your interest rate can adjust up or down depending on market conditions and what the interest rates are doing. It’s a gamble, but one that can save you quite a bit of money in the short term.

    It’s good to know that rate adjustments are capped at 5% above your initial rate and 2% per adjustment period. In simple terms, it means if your ARM rate is 3.99%, your rate will never be higher than 8.99% and will never rise more than 2% per year.

    Hope that helped. I’ve included some links below with some mortgage info that you might find useful.

  5. Reply
    Steve D
    February 24, 2011 at 2:42 am

    Today’s mortgage rate is irrelevant – you need to check your papers and find out what the index base is for the adjustment. Then someone can figure out the projected payments based on today’s rate.

    Now, if you are asking how much a payment would be if you refinanced at today’s rate, that is a different question…with a principal balance of 105,000 (making believe you rolled the closing costs into the new mortgage) for 30 years at 5.99% (today’s average rate according to bankrate.com), you P&I would be $ 629 – add in the taxes )which you can get off your statement under the escrow part) and you have your payment for the next 30 years.

    if you were to finance for 15 years, your P&I payment would come out to $ 866. The obvious advantage to being able to afford the higher payment is the great savings in interest you would receive.

  6. Reply
    stan c
    February 24, 2011 at 3:30 am

    Who knows what rates will be in the future? Now is the time to refinance the mortgage. Make sure you get a fixed rate open end which means you can pay down the mortgage without being penalized. Whether you go 15 or 30, the first half of the loan you pay about 70% in interest. Request an amortization that will give you a complete break down between interest/principal. Better to be safe noe than sorry later.

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