Mortgage reset at 3% from 5% (1 year adj)

[tripods68]

We didn't know how much our adjustable rate would go down, if any for next year. We got the letter from our lender and it read 3% starting next Feb. That's a savings of $290 a month of mortgage for the next 12 months. It was definitely a SHOCKER! Every bit helps.

[disneysteve]

That's great. Keep making those same payments if you can and you can really chip away at the balance. It might also be the time to look into switching to a fixed rate loan. We refi'ed last month into a 15-year at 3.99% and I've seen rates even lower than that.

[tripods68]

Thanks Steve,

Unfortunately REFI is beyond our reach, being that we are up-side-down. It looks like we are staying put for a while.

[disneysteve]

In that case, keep making the same payments you were making at the higher interest rate. That will put an extra $290/month toward principal and get you out from underwater much faster. Once you have equity, if rates are still low, then you can refinance and lock in that low rate for the remainder of the loan.

[SimplySaving]

I second disneysteve. The best thing you can do for yourself right now is pay down that mortgage. I'm sure it's really tempting to do something else with that money but think of how much faster you will get out from under your house if you pay all that extra on principle. I would also be doing just about anything I can think of to save money to refinance and lock in those rates. Good luck!