Funny, I took an ARM during a peak interest rate period in 1985, started way low and automatically adjusted on a quarterly basis until it caught up with whatever the current rate was, and then adjusted with the rate. Shortly after we took the mortgage, rates started to drop, and about the time the rates met, I called the lender and offered to lock in fixed where we were at the time, they agreed, but wanted to charge me a bunch of fees. I told them that I was doing them a favor and they should do it for free, and the person thought I was being funny.74novaman wrote:We've been through Dave Ramseys Financial Peace classes, so we knew to stay FAR away from an ARM.USA1 wrote: As long as you don't have an ARM (adjustable rate mortgage), then you're good to go.
Every quarter after that, as the rate continued to drop, I called them and asked if they were happy now, but did not make the same offer again. At one point they sent me a letter, standard advertising disguised as personal with a signature of a person who really doesn't exist, offering to do a re-fi at the new low rate, with minimal fees. I called the person whose signature it was sent over, and of course was unable to talk to them, but left a message that I was happy with the rate I was going to get when the rates dropped again, and I would continue as I was, but any calls back to me should be ONLY from that person. Never got a call back, and my rate dipped well below the original rate.
One of the few times I have ever gambled on financing, and one of the few times I have ever heard of an ARM working in the favor of the lendee.