If you currently have a mortgage that is about to adjust, let us assist you in choosing the best option. Re-financing out of an adjustable rate mortgage may not always be the best choice if you can afford the higher payments, and you plan on moving out of your home in the near future. However if you plan on staying in your hope for a while, it is best to re-finance into a fixed rate mortgage. If you cannot afford the higher payments on your mortgage, it is recommended that you start the process of your re-finance at least 30 days prior to your first adjustment in order to avoid this payment.
EX: Intitial interest rate = 5%, Adjusted rate = 7.5%. The difference in payments on a $200,000 mortgage = $325/mo. You then have to determine how long you plan on staying in the home and if this outweighs the costs of re-financing.
Adjustable rate mortgages typically provide lower payments than a traditional fixed rate mortgage. The advantage of a lower payment is beneficial for those types of consumers that are planning on staying in their home for a short period of time, expect an increase in their income in the near future, or are in the process of re-building their credit and cannot currently afford a traditional fixed rate mortgage. The initial fixed term for an adjustable rate mortgage can vary anywhere between one month to nine years. At the end of this initial fixed rate period, the rate will begin to adjust. If you decide to re-finance, you should begin the process at least 30 days in advance of your first adjustment to help avoid making your increased payment. Click here to begin the process.
