Who understands mortgage finance?

I have a question. My mortgage is on a flexible interest rate - yes, I know, bad idea, but it is what it is.

The rates are locked in for three years at a time. So, just got notice from the bank that my renewal rate is about to change next month. Here is what I don't understand.

The interest rate is the same as before and not changing.
The index rate is the same as before and not changing.
My balance is obviously less than it was three years ago.

So why is my payment going up by $ 20. Why doesn't it stay the same?

And don't tell me I need to refinance to a fixed interest rate, I already know that.

Thanks!!!!

Probably taxes or insurance if in escrow. That would be my only thought.

I don't have an escrow. I pay the taxes and insurance separately. That was a good thought, though.

Even if your index is fixed it still gets adjusted. This could be why.

Probably best of you just give them a call and ask.

Posted by robyn808
Are you putting you closing cost back into the loan?

No. I'm not. It's not a new loan. They just refigure every three years since its a flexible.

Posted by ellessque
PMI Insurance?

I know some mortgage companies are playing around with that these days because a lot of us have taken a hit on our equity when our homes were re-assessed.

I lost $ 20K in equity over the recession.

My home was JUST now re-assessed (this spring)....so at the least I'm coming out better on property taxes......but I still fall under the PMI requirement (I owe more than 80% on my home).

They are using different calculations these days. Used to be if your loan was $ 125....and you got that down to 80% ....they would drop the PMI.....now they are playing a shell game and adding the actual "worth" of your home...which is really skewed these days.

I'm not saying that is the reason, beyond a shadow of a doubt....but definitely something to look into and worth asking.

That may be it. And we have the insurance that pays it off if one of us dies. I forgot about that. Oh well, $ 20 more ain't a bad thing!

Yeah, I lost a lot of equity on my main home, also ..... nearly 30 grand

Elle: "They are using different calculations these days. Used to be if your loan was $ 125....and you got that down to 80% ....they would drop the PMI.....now they are playing a shell game and adding the actual "worth" of your home...which is really skewed these days."


Yes, they used to use averages and now are using actual value ... which sucks turds considering the short-sale and foreclosure inventory has lowered the value of everyone's property.

truecap - it's just a matter of using actual figures for your PMI, rather than averages, just like Elle said.



It sucks so bad though ... I spent a decade buying down my loan, only to lose it all.


The government fucked up so bad .... they needed to bottom up the economy, rather than trickle down ... that shit doesn't work and it's been proven time and again.

Thanks yall. I understand a little better now. I work in healthcare. Me knows nuthin' bout financin'. 🙂