Your “ARM” is killing you… Foreclosure

Adjustable Rate Mortgages (ARM’s) are killing Homeowners dreams at an alarming rate. Five years ago when the ARM was introduced it sounded like a dream for future homeowners. It has now become a nightmare. When the rate goes up too many homeowners are facing Foreclosure because all of the sudden they can’t afford their house payment.

Nationally it is estimated that 30% of all Mortgages are ARM’s. If you are like millions of other home owners when you agreed to an ARM you were thrilled because it allowed you to purchase a bigger and better house for the same payment as a cheaper and smaller one. These mortgages are called “Teaser Rates” and typically are very misleading. People hear that they can get a 5 percent rate, which allows them to afford a home. But then they stop listening. Now that the five year freeze on rate hikes are up the rate has began to climb. Here are some calculations to show the increases some home owners are facing:

$100,000 Mortgage

5.5% ARM

$ 567.79 monthly payment

5 Years later…

$100,000 Mortgage

9.5% ARM

$ 840.85 monthly payment

As you can see, these numbers show a payment increase of $273.06 per month or almost a 50% increase. This is killing most budgets as the monthly surplus a home owner may have will not cover this increase. Therefore they are not able to maintain their mortgage payment and are becoming delinquent. Faced with this new dilemma what can the home owner do to keep their home?

If you have a good payment history with your Mortgage Company, before the rate increase, we can help you. American Foreclosure Specialists can help you keep your home. We can negotiate with your Mortgage Company on your behalf allow you to stay in your home at a payment you can afford. We have proven strategies that will allow us to modify your Mortgage so that you are no longer have the “ARM” and now have a payment that will fit your budget.