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Oops, our mortgage rate resets 2 months later than expected

Last week, I explained how we’re going to save big money on our mortgage when our rate resets. In the article, I thought the rate would reset on the anniversary of our closing, which would be this November.

However, I just logged into our lender site and the “Next ARM Adjustment Date” isn’t November. It resets on 01/01/2010.

So, I originally thought the prime rate would be picked on Oct 1st, but now I see it should be Dec 1st instead. What will the 6-month LIBOR do before then?

Right now, the LIBOR is at .67. Last week it was at .70. It’s still going down, but how low will it go? I was excited for Oct 1 to come around, now I’m worried about what our rate will be again. Either way, it will be less than what we’re paying now as I doubt the rate would jump up to 3% (add our 2.25% margin rate to get to our current 5.25% rate). And then we have another 6 months to refinance/sell/whatever.

And if your suggestion is that I better refinance now while rates are low, we’re in a bind as we’ve lost most of our equity in the last couple of years, so refinancing would be an expensive proposition.

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