Tag Archives: HSBC

I’ve been very fortunate with my Home Mortgage ARM

I originally purchased my condo almost ten years ago. I purchased it with a five-year ARM (Adjustable Rate Mortgage) which means that after the five years my interest rate changes once a year. Since I never thought I’d live here five years, let alone ten it seemed like a good option for me. I’m still living here and due to a variety of circumstances my rate never started fluctuating until last year (see my ARM story from last year).

I was pretty happy when my mortgage rate only jumped up a little last year, but with the economy even worse this year my rate actually dropped 1.625% to a new total of only 3.25%! I know this shows the economy isn’t very good right now, but (while I don’t really talk about it) my personal economy isn’t so great right now either, so this is really a good thing for me.

I believe my mortgage rate is is based on a margin of 2.875% plus an index (1 year treasury-bills) which is currently 0.40% so that makes that a 3.25%. So unless the index can go less than 0.0.% (and I don’t think it can) I’m pretty much as low as it can go.

FYI, My mortgage was bought up by HSBC as soon as I got it (within hours) and they’ve been a pleasure to work with. And to get my mortgage, my first mortgage, my bible was Mortgages for Dummies. Also, Here’s a place to get the current and past rates from the U.S. Treasury.

My Adjustable Rate Mortgage Adjusted

So it’s that time for my five year ARM (Adjustable Rate Mortgage) to start adjusting. Was a little nervous because I didn’t know how it would go. It could have go up 2% but it only jumped from 4.25% to 4.875% so I’m pretty happy about 5/8ths of a percent (it’ll stay that rate for the next year). What I couldn’t understand was why my payments dropped if the rates went up? Turns out they recalculated my mortgage based on what I currently owe and since I’ve been paying extra on my mortgage it went down; so even though my interest is going up $45-ish a month it actually dropped my monthly payment.

I’ve had a really great experience with my first mortgage. I set it up with a local company and it was immediately sold to HSBC (it was sold so fast; I signed Friday at 4 pm and Monday I got HSBC paperwork dated from Friday). I purchased the five year ARM at 6.875 interest (I think I paid a small amount for points to drop it 3/8 of a percent) then a few years later I had them redo my interest rate to 5.25% with just a phone call (and a $750 processing fee on my MasterCard) and then I did it once more (5 years ago) to 4.25% for another $750 phone call. The phone call required no paperwork, just them checking my credit and my payment history. So I managed to stretch this 5 year ARM out to almost 9 years while dropping my interest rate in the mean time.

It’s worked out quite well for me (other than the fact that housing values have dropped) especially since I never thought I’d live here even 5 years :)