How to calculate adjustable-rate-mortgage reset

Learning 'current projected rate' will yield best estimate

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In recent weeks, my mailbox has overflowed with messages of distress from borrowers faced with an imminent rate adjustment on their adjustable-rate mortgages (ARMs). Most of them want to refinance, but many of those who had earlier taken 100 percent loans are stuck. With the current softness in the housing market, they now owe more than their homes are worth. Lenders are strongly resistant to refinancing loans with balances exceeding property values. A striking feature of the letters I receive is that the great majority of the borrowers don't have a clue as to exactly what is going to happen to their ARM rate. They know it is going to go up but they have no idea how much. Many of them assume that it is worse than it is in fact, perhaps because this gives them an excuse for not doing anything to prepare. If this describes you, it is time to shake the sand out of your eyes. While you can't know exactly what your ARM rate will be on the adjustment date -- that depends in par...