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Ghulam Ariamal Asked:

I have a 36 month ARM with 1% interest and optional principle payment that will expire at the end of this september. The only viable option for refinancing is FHA 30 y fix but increases my monthly payment by $500. I would appreciate your advice. ? to hold on the current ARM or refinance. [Colton CA]



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Answer Provided by: Bret Hoefler [09/03/2008]

Ghulam, This is a loan that allows for your balance to increase (negative amortization) if you didn't pay enough in your payment to cover the interest. I would need to know your index, margin current balance and original term to be able to answer your question for you. More than likely you would be better off moving to a fixed rate type of loan. Depending on your remaining equity, FHA may be a choice for you. However, if you have enough equity you will want to use conventional financing. Please feel free to contact me for more specifics! Bret Hoefler