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new interest rate is based on 6 mnth libor index rate.my rate only increases on interest balance not full balance.mortgage is 225,000.how can i figure new payment? do i go by the libor plus my apr? please help.not mortgage literate.

2 Thoughts on my mortgatge is 5 yr interest only but is 30 yr variable /adj rate. 3rd yr is up.after 3rd yr pymnt goes up?
  1. Reply
    shacker2762
    February 15, 2014 at 7:54 am

    I believe you are correct – it’s the 6 Month LIBOR + your APR. This can cause it to go into the double digits (libor was at 5 last year!!). So, if you had a 6% APR and LIBOR is at 2.74, your new rate is 8.74% I went thru this a few months ago myself and I can’t the letter I got from the bank but I do think you are correct about the formula. Now, it’ll reset again every 6 months for the life of the loan (at least mine did) so now would be a good time to re-finance into a fixed rate.

  2. Reply
    Carlos L
    February 15, 2014 at 8:53 am

    Good finance question! I know of an organization that gives up to $ 1500 to people to help them with their rent or mortgage. It’s available in most US cities, I highly suggest you check it out.

    http://www.we-mortgage-help-rent.org

    Best of Luck.

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