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What is 5/1 ARM Mortgage ?

We are in a very difficult situation right now financially. My husband got let go of his job. and we can't afford to pay our house anymore. I want to know what will happen if we foreclose our home when we have this 5/1 ARM mortgage. do we still have a loan with the bank . Because this 5/1 ARM mortgage , we got it from a different bank. in other words we have a mortgage in this other company & with this bank.

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Anonymous

Asked by Anonymous at 11:22 PM on Jan. 20, 2010 in General Parenting

Answers (2)
  • If your home forecloses then you won't owe the money anymore, the bank takes the house from you and the foreclosure will hurt your credit- I don't think you can buy a house for at least two years. Have you tried a loan modification with your bank? They can reduce your monthly payment depending on your situation- you can call the company you make your mortgage payments to and ask about this. I just recently did it.

    A 5/1 ARM means that your rate is fixed for the first 5 years and then the rate can increase periodically once the 5 years are past. But you should only have one mortgage, even if it got sold to another lender, unless you had a separate 2nd mortgage or home equity loan.

    If you want to send me a message, feel free. I worked in the mortgage industry, I am by no means an expert but might be able to offer some helpful hints. Good luck- I have been in your shoes so I know it stinks.
    MaryMW

    Answer by MaryMW at 11:36 PM on Jan. 20, 2010

  • If you are being forclosed on I would look for a rental now once this hits your credit you will not find a good rental that won't require a huge deposit and a cosigner. My brother and his wife just lost their home and are in a very bad neighborhood and they cannot get into a decent rental house because of their credit. Can't blame the landlords if they could not pay their 800 a month mortgage why would they think they could pay the 800 in rent.
    Anonymous

    Answer by Anonymous at 10:00 AM on Jan. 21, 2010

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