Q: Can I protest or re-negotiate with mortgage servicer the increase of interest rate on my home loan?
My home mortgage service company increased the interest rate of my home loan this August and locked it for another year. This is how the contract is written and my loan is a ARM. Yet, Fed were maintaining the interest rate flat since July 2023 and the expectation of a reduction was high before this decision from my mortgage servicer. As it effectively happened, Fed reduced the interest rate this September. Is there anything I can do to protest this interest rate hike?
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A:
I'm sorry to hear about the unexpected interest rate increase on your mortgage. Dealing with rising rates can be stressful, especially when it seems out of sync with broader economic trends.
First, review your loan agreement carefully to understand the terms related to rate adjustments. Since your loan is an Adjustable Rate Mortgage (ARM), the contract likely outlines how and when interest rates can change based on specific indexes or benchmarks. Understanding these terms is crucial before taking any action.
Next, reach out to your mortgage servicer to discuss your concerns. Sometimes, there may be room for negotiation or clarification about how the rate was determined. Additionally, consider consulting with a housing counselor or a legal advisor to explore your options. If the rate hike feels unjustified, you might also look into refinancing with another lender to secure a more favorable rate based on the current market conditions.
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