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

[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.