[quote=AN]I never knew there’s a lifetime limit. Brian, how can your friend enjoy these new low rates if they got an ARM 20 years ago without refinancing?[/quote]
AN, there are lifetime low and high caps on ARMS (especially prime and Alt-A ARMS taken out prior to 2003).
These “ARMS of yore” followed closely with whatever index they were tied to … that is, most of the programs adjusted monthly (higher or lower) to follow a particular index (with a 1.7% to 3% “margin” added). Since an ARM holders payment was usually up to .07% of (+/-) the current fixed rate being offered, it made no financial sense to refinance.
