What is an ARM and what is "ARM Reset Shock"? An adjustable rate mortgage (ARM) is a mortgage with an interest rate that is linked to an economic index. The interest rate is periodically adjusted up or down as the index changes. What that means is that if the index goes up, so does your mortgage rate and your monthly payments!

Often people fall prey to teaser rates that are very low for the first two to five years. They get comfortable with low monthly payments, and it's easy to forget that future payments will most likely be higher. They face a shock (ARM Reset Shock) when the initial period is up and the interest rate is adjusted, or reset, to the current rate. Payments often become more than people can afford per month.

In 2003 through 2006 Adjustable Rate Mortgages exploded in popularity. Rates were low and property values were high. (ARMs are a good choice if rates are low and you are keeping your home for less than five years.) But many irresponsible lenders sold ARM loans to folks who would never be able to handle higher payments down the road, and didn't imagine a turbulent housing market.

From the present time up till the year 2012, millions of homeowners will find their ARM rates reset, blowing their monthly payments sky high!

What can I do if my ARM is ready to reset?

One of the best options is to refinance your ARM mortgage to a fixed-rate mortgage before the reset date arrives. Even if it has already reset, consider refinancing before relentless, high payments eat away at your finances, making it easy to fall behind, and in many cases leading to credit problems, and possible bankruptcy and foreclosure.

How do I find out about refinancing my ARM?

Call one of our highly trained mortgage specialists for a consultation. Let us help you switch from a highly volatile ARM to a secure 30 year fixed rate mortgage. We are committed to making sure your mortgage not only takes care of current needs, but makes sense for future financial stability.