News & Features

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    <h1>
       News &amp; Features
    </h1>
    <p>
       A record number of adjustable rate mortgages (ARMs) are coming due and
      homeowners are feeling the pressure. Planning and basic education on the
      mortgage product can help homeowners survive their adjustment and be
      prepared for possible payment shocks.
    </p>
    <p>
       "With an ARM loan, timing is key," said Paul Swan, President of
      Nationwide Advantage Mortgage. "Some people wait until their rate
      resets before they do anything. But, it may benefit you to act early,
      especially if interest rates are expected to rise."
    </p>
    <p>
       When your ARM loan approaches its first rate reset, here are some tips
      to consider:
    </p>
    <h2>
        <strong>Make sure you understand how an ARM works</strong>
    </h2>
    <p>
       The adjusted rate of an ARM is determined by adding together the current
      index and the margin. The margin is determined by your lender at loan
      closing and will never change; however, the index fluctuates. Click <a href="/adjustable-rate-mortgage-utility.jsp">here</a> for an
      example and more information. Lenders may look at a variety of common
      indexes or use its own cost of funds as an index to determine the
      adjusted rate. To better understand how your payments may fluctuate, find
      out what index your lender uses and where it is published. Also, review
      the <a href="http://www.federalreserve.gov/pubs/arms/arms_english.htm">Consumer
      Handbook on Adjustable Rate Mortgages</a> which is a joint publication of
      the Federal Reserve Board and the Office of Thrift Supervision. This
      booklet provides detailed information on how ARMs work.
    </p>
    <h2>
       Review all of the rate adjustment terms
    </h2>
    <p>
       Many ARMs have periodic adjustment caps and lifetime caps, which limit
      the amount your interest rate can increase periodically and in total over
      the life of the loan. Commonly, there is a lower percentage interest rate
      cap on the first rate adjustment and a higher lifetime cap on the
      interest rate above the original Note rate. If you're unable to locate
      your rate adjustment terms, contact your mortgage lender for assistance.
    </p>
    <h2>
       Review all the terms of your current loan
    </h2>
    <p>
       In addition to the rate terms of your loan, you should also review any
      other terms that may influence your decision to continue your current ARM
      loan or refinance. Common terms you should look for in your loan
      documents include prepayment penalties and balloon payments.
    </p>
    <h2>
       Know your options
    </h2>
    <ol>
        <li>
        Continue your ARM loan. After reviewing your loan and rate adjustment
        terms, it may make sense to continue your ARM loan and manage the risk.
      </li>
        <li>
        Refinance. Be sure you see the total picture before making a decision.
        The lowest rates are not always the best deal. Lender fees, discount
        points, and the schedule for principal reduction are some major points
        to consider. Also, while today's 30-year fixed rates may be higher than
        your current ARM rate, they are still among the lowest in history and
        would offer long-term stability.
      </li>
    </ol>
    <p>
        <strong>Consult with a reputable mortgage professional</strong> who will provide
      you guidance in comparing the options above. Call us at 1-800-811-5385.
    </p>
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