Adjustable Mortgages a Growing Concern

The holidays are rolling around, and while many homeowners aren’t thinking about their mortgage, those that have adjustable rates are starting to get worried. Normally around the holidays, the national index (the main factor of an ARM) usually goes up. Though this is a normal trend, the index has continued to moderately rise over the last couple of years, making this holiday season increase one to worry over. Adjustable rate mortgages are dependent on the national index in order to set monthly payments after the introductory fixed rate is done.

Some homeowners are comfortable with their ARM, feeling that the increase will not affect them all that much. Some homeowners, however, note that if their monthly payment goes up much more, they may not be able to make their payments. This is partially responsible for the rise in foreclosures over the past year, as more adjustable rate mortgages start to readjust. Those owners that can refinance out of their ARM are doing so in droves, while mortgage rates remain low.\r\n