Many homeowners choose an adjustable rate mortgage in the beginning so that they could get that lower rate initially. So whenever there is talk about mortgage rate adjustments those with an ARM wait with breath held to see what the next mortgage rate adjustment will bring.

The law requires lenders to give you a minimum of 25 days before they can increase your rates, and some give you much longer than that. Your mortgage agreement will spell out this information clearly. Even 25 days gives you lots of time to search for another lender if you aren’t happy with where your rate is going.

If your original mortgage rate was relatively reasonable and not one of the “teaser rates” that are significantly discounted you may find that your best bet is to stick with the lender you already have.

According to the Los Angeles Times most people with an ARM are comfortable with a couple of point increase but the big fear is that there will be large jumps in interest rates that homeowners will not be able to protect themselves from and that could skyrocket their payment out of reach, leaving them facing foreclosure.

After all much of what’s going on in the market right now is a result of deeply discounted interest rates that expired leaving homeowners with rates that although considered very reasonable, reflected a significant increase on their payments leaving them unable to meet their obligations.

What’s the answer? Perhaps it’s time to rethink your mortgage strategy. Perhaps rather than worrying about saving pennies today, it’s time to look out for your future and lock into a longer term rate where you know you’ll be able to make your payment, enjoy your home, and watch your equity grow… perhaps that’s the wisest decision of all… Long term gain for a little short term pain!