Mortgage payment adjusts

[nlbarber]

The annual mortgage interest adjustment letter arrived. I have a 30 year mortgage that had a fixed rate for 5 years, then became subject to annual adjustments. As interests rates have been fairly low over the 14 years I've had the loan, I've never bothered to shell out the fees to refinance to a fixed rate.

Won't happen this year either: Previous index: 4.92%. Current index: 1.52%

Thanks to this and to regular additional payments on the principal, the monthly payment dropped 19%. I will, of course, adjust the additional payments on principal upward to keep my monthly payment the same as it has been.

Comments

[trixtah.livejournal.com]

Wow. It's good you're overpaying, though. I'm surprised that the interest rate has dropped given the state of the country's economy, so definitely making the most of it is a good thing.

[nlbarber]

The interest rate has dropped because of the state of the economy, actually. The Fed has been lowering the interest rate to try to 'stimulate the economy' , and more recently to try to stave off any bank collapses because of the subprime lending mess. I hadn't really realized how far it had fallen in one year, though!

[idiotgrrl.livejournal.com]

Still - keep paying it off and keep on paying down whatever debt you have. And if you have investments of any kind, even the kind that are "as safe as houses" and "sound as a dollar", keep a personal eye on them because your stockbroker will fill you full of optimistic baloney s/he is forced to believe as well as peddle. I've been keeping an eye on the economy for many months and believe me - pay them down or off ASAP. Anyway, congratulations on being on the *good* end of an ARM for a change!

[nlbarber]

Oh, yes. This is my only debt--never had a car loan, pay off credit cards every month. It's now in the range where I could pay it off if I wanted, and if that was the best use of the cash. I really need to sit down and do the analysis to see if I should. Maybe after the taxes are done...

[idiotgrrl.livejournal.com]

yes - don't deprive yourself of a major cash cushion. OTH, advice like "don't pay off low-interest debt because...." assumes a market that is either steady, or that will rebound in the near future. I think it's wisest at this point in time to assume a fairly long-lasting bear market. I notice that the people around me - the everyday working stiffs - casually refer to "the Recession" as if it were a done deal while the talking heads are still sidling around it with "maybe we might be edging into a recession at some future time." Uh, talking heads, remove said heads from where they're at, wipe them off thoroughly, and hang out at the local donut shop.

Sorry. I'm bearish. My parents had tales to tell of the last time this happened. Beans & rice recipes on request.

[filkferengi]

Do run your analysis as soon as you can. Given whom I married, it's not exactly a surprise we're all about being debt-free. Besides, think of the fun you can have celebrating--for which I'm sure any number of willing helpers are available [looks helpful]. ;)

Also, yay!

[coalboy.livejournal.com]

Wow. Congrats on decision to keep payment same & pay down mortgage, though can't imagine you doing otherwise.