Should we lock in?

**mommy4ever** · 07-12-2007, 09:09 AM

We are ina variable rate mortgage. We just had an increase in prime, 0.25% and they are predicting 3 more increases in the next year. Currently we are at .25 under prime on our variable mortgage. If we lock in, it would be 1 over prime. BUT, the increases if they happen would mean in a year or 2 we'd be locked in AT prime or less if it keeps increasing.

That said, it was said there's be several increases last year, but this is the first in a year.

I don't know. It would save us renewing the mortgage for an extra 2.5 years....

**kaykwilts** · 07-12-2007, 09:38 AM

I think you should get a mortgage where you won't have to worry about the rate climbing.

**Buckeye5** · 07-12-2007, 10:26 AM

You need to get out of the ARM as soon as possible, these rate increases are causing many foreclosures.

**Neeley** · 07-12-2007, 10:46 AM

I have to agree with Kay and Buckeye....Get out of that ARM ASAP.

**sdrjeolsen** · 07-12-2007, 10:54 AM

I think rates are going to rise eventually, but with the election year, just my opinion, probably not much at all. I think they will continue to fluctuate up and down till after the election. Still I hate ARMs, I would lock in just for peace of mind. At some point you will probably want to lock anyway, so now is probably the best time...who knows what the future holds when it comes to rates, its really just a gamble. We locked in at 6.25 (it's a jumbo loan) but now rates for jumbos are jumping between 7.25 and 7.5. I am SO GLAD we locked in, just that 1% saved us over 378 dollars each month. If it were to jump, have you figured out what your breaking point is...at what point you would def. have to lock in to keep the budget running smoothly? If so, do you have much wiggle room? If you do, you have a little bit of flexibility as to being able to wait and see, if not, I would lock.