What To Do When Your Adjustable Rate Mortgage Increases

Q: We have an adjustable rate mortgage that is scheduled to go way up this year. What can we do? Dana, Essex Fells, NJ

A: Many people opted to buy homes with adjustable rate mortgages recently because home prices have been historically high and adjustable rate mortgages (ARMs) offered lower initial monthly payments for many home buyers. Unfortunately, adjustable rate mortgages are not fixed and mortgage rates have risen. When the initial teaser interest rate ends, borrowers like you are then hit with a rate hike that can be hard to afford. If you’re having trouble getting refinanced and a big rate adjustment is imminent, there are government programs that replaced the HARP program that may be able to help. A HUD-certified housing counselor also may be able to help you explore your financial options. Thanks for your question, Dana.

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