DH and I got a letter last week telling us that our ARM is going up $500 a month starting July 1st. Our home is worth less than we paid for it, so we don't think we can sell it or refinance. I am so sick over it! I wonder if anyone else is in the same position? And I knew better than to agree to an ARM! I had a condo before the house but everyone convinced me we would be able to refinance before this happened!

From what I've been reading, a huge percentage of Americans are in your position, hence much of the foreclosure crisis going on. How long ago did you buy the house? Sorry I've no suggestions for you. That's the downside to this type of loan.

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I'll be thinking about you and hope you find a way to refinance. Sorry I have no other advice than to try and do that.

I am so sorry this is happening to you! These mortgage people who told everyone they could refinance before it goes up should not have done so. I have a finance degree, and I would NEVER ever get an ARM!
My only suggestion is to try to cut back your spending between now and then by $500 (if you can!); that way, you will have more in savings when it starts, and you will be used to the higher payment. You are right - if your house does not appraise for what you owe, you cannot refinance. If you ever need to talk, I am here!!

Is there any way to get a personal loan for the difference between what your house is worth and what you owe? You could then refinance for what the house is worth?

If the new payment amount is absolutely beyond what you can do, call the lender before you get behind on even one payment. If your credit is good, lenders are being pressured to come to new terms with people in your position rather than foreclose.

Hope you can work something out.
Cathleen

i agree call your lender now they may be willing to put you into a loan with them at a fixed rate in order to avoid you defaulting(foreclosure costs a lender over 40,000 in fees alone not including sitting on a house in a bad market) if the payments get to high.. the arm was definately a risky move start now trying figure out a solution before it comes to july 1 and you may end up getting behind if you can't afford the extra 500 a month.

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I 110% agree with Cathleen..call your lender...TODAY. You never know until you ask, they may be willing to work with you and I'm sure they'd much rather work with you than have you go into foreclosure. And in the future stay away from ARMs. I did mortgages and I hate ARMs.

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Yes, call your lender today! They are more than likely going to be willing to work with you to redo your loan so you can afford it. It will cost them too much to foreclose on you rather than work with you.

Thank you everyone for your support! Yes, I realize it was a bad thing to have done and now DH and I are paying heavily for it. I have learned my lesson! I am hoping the maket rebounds sooner than later!

I have called our lender a few times in the past year including last week when I got the letter about the increase and they charge $425 to apply for a hardship application! How ridiculous! We are going to speak to a realtor this week to see if she has any advice bc she has been in the business for a while and has seen the market go up and come down.