An ARM, or Adjustable Rate Mortgage which is approaching the end of its introductory fixed rate period (usually 2 or 3 years from the purchase date or the date it was last refinanced) in 2007 or 2008 will usually mean a substantially higher mortgage rate and mortgage payment.
Current market conditions make the option of refinancing an expiring Adjustable Rate ARM mortgage to convert to a fixed rate and fixed payment mortgage more attractive than ever. Adjustable rates are at 5 year highs, and fixed rates are currently a bargain.
Refinancing your adjustable rate mortgage into a fixed rate mortgage is a good idea if you plan on keeping the home longer than 3 years. This will provide borrowers with the peace of mind in having a set payment.
In most cases, a mortgage rate adjustment means a sudden increase to your monthly bills of hundreds of dollars (or more). These adjustments are costly and could play havoc on your budget, children's tuition needs, savings strategy, retirement plans, etc. Before you are hit with such an adjustment, give me a call at 888-418-4467. I'll be happy to show you how I can save you money every month by placing you into a fixed rate program.
Adjustable Rate Mortgages usually carry a much lower introductory mortgage rate and mortgage payment than the equivalent fixed rate mortgage at most times, however for many borrowers a longer term fixed rate mortgage can presently be obtained at mortgage payments which are highly competitive with ARM mortgages. Industry experts do not expect fixed rate mortgages to remain competitive with ARM mortgage rates for long, as historically the gap between the two types of mortgages is substantial, making this an excellent time to consider refinancing adjustable rate ARM mortgages into fixed rate programs.
Refinancing an adjustable rate mortgage (ARM) to a fixed rate mortgage can be a good idea when your adjustable is about to reset. You can avoid paying a higher monthly payment by refinancing your adjustable into a fixed.
If you have an ARM loan, adjustable rate mortgage loan, that is getting ready to make it's first adjustment you should contact a mortgage professional at least 30-60 days in advance so that you can time the refinance perfectly. By timing your refinance perfectly you will not have to experience the large increase in the interest rate and the large increase in your monthly mortgage payment from your Adjustable Rate mortgage, and you will be able to obtain your new loan with your low fixed rate quickly and efficiently.
Many borrowers usually purchase homes with adjustable rate mortgages only to convert them by refinancing to a 30 year mortgages after a few years. As borrowers income increases they can qualify for fixed rate mortgages.
Should you refinance from an adjustable to fixed rate? If you have an adjustable rate, you can be certain that your rate will increase on its adjustment date. It is recommended that you contact a mortgage professional before your rate adjusts. Going from an adjustable to fixed rate will help you avoid continuous, periodic rate increases.
Discuss your long term financing plans with a professional mortgage broker. You may find that long term, refinancing from an adjustable to a fixed rate will fit into your long term financial goals.
Adjustable Rate Mortgages adjust more than just once. Just because you are comfortable paying your new, higher payment doesn't mean that it will be affordable after several more rate adjustments. To put an end to the downward spiral of higher rates and payments, consider refinancing into a fixed rate mortgage loan program.