Adjustable-rate mortgages

Like many people with ARMs, Clejan is facing a difficult decision. She has to figure out how long to keep her current mortgage, which carries a 4.25 percent interest rate, before refinancing to a rate that would likely be in the 6-percent range. If she refinanced now to another interest-only mortgage, Clejan estimates her monthly tab would go up to $2,746. That would put a greater strain on her monthly budget at a time when her income is suffering from the turmoil in the mortgage market.

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