[Rick Lee]

I have written here many times that ARM's do adjust down. It's happened to me and will probably happen again with my current LIBOR ARM set to adjust in November 2009.

Terry, let this be a lesson that you can forecast what your ARM is going to do well before you get official notice of it. I doubt your ARM is tied to a "current interest rate". Most ARM's are tied to LIBOR or the One Year T-bill, not the "current interest rate", whatever that is. Most ARM's are also capped. Usually, the cap is higher for the first adjustment than for subsequent ones and there is also a cap for life of the loan. If your cap is 3.00 and your current rate is 5.00%, then your rate cannot go below 2% or higher than 8% for the first adjustment. Find out what your index is. You know your margin, but what's the index? You can see it in the WSJ every day, add your margin to that number and then compare the sum to your current rate plus or minus the first adjustment cap.

I'm currently at 4.375% and it's tied to LIBOR. If it were to adjust today, it would go way down.