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Roger, Lawyer
Category: Real Estate Law
Satisfied Customers: 31734
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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WE have a 15 year arm on our home. We paid extra principal

Resolved Question:

WE have a 15 year arm on our home. We paid extra principal by paying one extra house payment every year for 6 years by splitting it up over 12 payments. They are now saying that it only shortened our loan by 2 months. when asked how it only shortened it by couple of months. After getting no answers from several people I backed one into a corner and she said that they lowered our house payment every year. We did not notice a much of a decrease other than our interest rate going down. So the question is, With an arm loan do they base your payment every year off your principal balance?
Submitted: 5 years ago.
Category: Real Estate Law
Expert:  Roger replied 5 years ago.

Hi - my name is XXXXX XXXXX I'm a Real Estate litigation attorney here to assist you.


Yes, that's exactly what adjustable rate mortgages do. Interest rates for an ARM are directly linked to an economic index. Therefore, the interest rate, and your payments, are periodically adjusted up or down as the index changes.


You have a right to demand to see the adjustments made and ensure that they were correctly made, but it's likely that what the lender did is appropriate for this kind of loan.


Please let me know if you have any additional questions.

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