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For those borrowers that got into an Option Arm in the last few years, your payment and rate has probably already started to adjust or will do so in the near future. If you have being paying the minimum payment since you got into your option arm you have until your deferred interest has reached 115% of your loan amount, typically. The option arm can then recast, which will lead to an considerable increase in your monthly payment. If you are looking into refinancing out of your Option Arm program, remember to ask your Loan Officer whether or not you have a pre-payment penalty on the loan. He/she will know whether you do or not by ordering the payoff. If your mortgage balance is nearing 100% of your appraised value, you should consult a mortgage professional in hopes of getting out of your Option ARM before it is too late and you are upside down. If you have an option arm, NOW is the best time to look into refinancing. The longer you wait, the less equity you will have if your property is not appreciating and you are nt making the fully amortized payment. Declining real estate values is a major concern for anyone that has an option ARM mortgage. If real estate values have fallen in your area and you still have some equity left in your home you may want to consider refinancing out of your Option ARM mortgage. Nothing could be worse then to find out you have deferred to much interest and now owe more then it is worth! Many borrowers who like the low minimum payment of an option ARM, particularly those with substantial equity remaining in their homes, are finding that the adjustable rates on these mortgages, which can vary month to month on most option ARM loans, can cause more rapid negative amortization than they originally expected. Many of these borrowers are choosing to refinance out their option ARM loans into Fixed Rate Pay Option moortgages, which keep the multiple payment options but fix the rate for predictable but controllable negative amortization. If you got into an Option Arm loan in the last few years and your prepayment penalty term is almost over, it would be advisable to contact a mortgage broker to discuss getting into a fixed rate mortgage.
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