WELCOME TO THE ADJUSTABLE RATE MORTGAGE (ARM) RISK TEST SITE!
PLEASE TAKE THIS TEST! IT COULD SAVE YOU THOUSANDS!
This website was designed for consumers to have a tool to evaluate if their current adjustable rate mortgage (ARM) may impose unnecessary risks to their financial future.
A CLEAR AND PRESENT DANGER EXISTS FOR THOSE WITH ARMS
Please use this tool as a proactive financial management tool for you and your family. Many over aggressive lending practices and low initial teaser rates on ARMS have left many borrowers or families in very tough situations. (See the news articles section of this website) This is not meant to scare anyone, just provide a proactive tool and cold hard facts to make sure you do not get yourself into a tough spot of your own and head off any potential financial hardships.
You can test your ARM one of 3 ways
1. SELF TEST - The 800 number 800-786-6960, ext. 3008 has 24 hour recorded detailed instructions of the information required to self test your loan for if, when and whether your ARM will go up or down. If you have any difficulty you may press 0 at anytime to request assistance from a risk evaluation expert.
2. ON-LINE TEST - You may fill out the on-line loan risk test and it will be forwarded to a risk evaluation expert. They will review it and email the results back to you.
3. LIVE ASSISTANCE - Live assistance is available by calling 800-786-6960, ext. 3008. Anytime after you hear the recorded information begin on the phone line, you may press 0 to be connected to a risk evaluation expert. They are available from 9:00AM to 8:00PM CST to help you complete the risk test on-line or they can take your information and complete your evaluation over the phone. You may receive your results by email, mail or phone.
FED INFLATION FIGHTING PUTS ARM BORROWERS AT RISK
During periods of Federal Reserve Bank (FED) intervention, the raising or lowering of rates, can have a dramatic impact on consumers current and future finances. Since June of 2004 our FED has been diligently raising short term rates to eliminate inflationary risks. The negative impact of this inflation fighting campaign is felt in consumer loans such as auto loans, credit card rates and existing adjustable or variable rate mortgages and home equity lines of credit. These become a great risk to the consumers that hold them. Now the FED hopes that these new higher rates deter us from seeking out more credit and slow our spending, however those who made decisions years earlier when rates were lower can really feel it if they have any adjustable rate financing.
THE EFFECT OF FED TIGHTENING HAS A SILVER LINING
During aggressive periods of FED rate hikes, long term fixed rates many times react in a positive fashion by staying flat or sometimes even dropping. This happens because the best friend of long term yields is low inflation and short term rate hikes are signals to these markets that the FED is being vigilant to fight inflation. Why would rate hikes create a silver lining? Well, if short term rates go up aggressively and long term rates stay flat or even fall, an inverted yield curve presents itself. That is bad news for a borrower with an ARM as their loans are tied to short term rates, but because of flat or dropping long term rates this leaves a window open for ARM holders to get out of the burning building and into low fixed rate financing. The good news is that this silver lining exists presently and the test we designed here is to help you decide whether to wait it out, or get out of your ARM while the opportunity exists. In other words, should you protect the gains you made through payment savings from your initial low rate and bank them? If you wait until your rate goes up you will be giving those savings back just like someone who holds onto a stock too long as it drops in value. Take advantage of the silver lining if it makes sense. The inverted yield curve can be looked at as a SELL signal from your Stock Broker.
HOW LONG WILL THE WINDOW BE OPEN?
This could truly be the $64,000 question for some. The truth is nobody truly knows exactly how the market will turn. A long term flat or inverted yield curve usually causes systemic problems for the economy, so either long term rates will rise closing the window or short term rates will be lowered if weakening in the economy presents itself. Right now the bets are that long term rates will have to go up as the economy seems healthier rather than weakening, so your window may close quickly. In 1994, when the FED inverted the curve the window was only open for about 12 months. Adjustable rate borrowers had to wait 3-4 years after it closed for another opportunity to get out of their ARMS at lower rates. This window to take a serious look at your potential risk exists presently. The fact is that nearly every ARM is going to adjust higher based on the current yield curve. The questions that we hope this service will answer for you is how high and if you should wait or act now. The worst thing you will find out after speaking with a loan risk evaluation expert is that everything is okay with your ARM, and the best is that there may be an option or two that is out there that will save you thousands of dollars by being proactive rather than reactive.
Please gather your closing papers from your last closing and pull your adjustable rate note and or adjustable rate note rider.
You will need this documentation to complete the test. If you have any difficulty understanding these documents, please dial
1-800-786-6960, x3008
and press 0 to speak with a Risk Evaluation Expert.
Last Updated 2007