Will mortgage rates rise up after the first year?

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According to my mortgage papers, I can not pay more for less than 7.85% or 13% over the life of my loan. Since October this year will go, but I want to know if not going all the way to 13% or less to begin with?

3 Comments
  1. Reply
    Brian G
    April 30, 2011 at 12:14 am

    Most ARM’s have a maximum that they can increase in a single year. The one I had was a max increase of 1/2%. Check the terms of your mortgage to see if this applies in your case. It’s unlikely that it will go all the way to the max after just one year, unless they are trying to make you default so they can foreclose on you.

  2. Reply
    open4one
    April 30, 2011 at 12:21 am

    Probably not.

    Look at the Promissory Note, probably paragraph 4. It will state the limit the interest can change each time. Most of them I’ve seen are limited to 3% the first change, and 1% up or down each change after.

    That doesn’t mean it will go up that much, that’s just the limit.

    Oh, and the Mortgage may have an “Adjustable Rate Rider” that describes the same terms. There should not be a difference between the rider and the note, unless someone made a mistake.

  3. Reply
    John S
    April 30, 2011 at 12:57 am

    It is obvious your common sense is on the same level as your spelling. You should have never accepted such a loan to begin with. Anyway loans have a initial increase and a lifetime cap. Have someone with an education read you your loan documents.

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