Finance

Your MasterKey Account

Username:

Password:

Not A Member?

It's Free!

Keep In Touch

• MasterKey Bulletin
• MasterKey Digest
• MasterKey Forum
• MasterKey Network
• MasterKey Twitter

Key Topics

Link Topics

Hot Topics

Tell a Friend

Support Desk

Adjustable Rate Mortgage Refinance

Refinancing your Adjustable Rate Mortgage

Do you have an adjustable rate mortgage (or ARM)? Maybe you decided on one because you wanted to make sure you were getting the lowest possible interest rate in a declining interest rate climate. Or maybe you just couldn’t pass up the low, low interest rates that adjustable rate mortgages typically have, especially at the beginning.

But now many people who initially chose adjustable rate mortgages are opting to trade theirs in for something that is a little more predictable. Adjustable rate mortgages are great as long as interest rates remain low, but if they start to spike upward, those borrowers could be in big trouble. If the interest rates jump unexpectedly, they could be looking at mortgage payments that are hundreds of dollars more each month than what they started with.

The answer is to jump over to a fixed interest rate, and the time to do it is when interest rates are at an all-time low. This locks you into a mortgage interest rate that will never change over the lifetime of the loan. So even if you refinance and get an interest rate that is slightly higher than the one you are paying now, it could still make good financial sense to do so, since the adjustable interest rates may be fated to go much higher than any of the fixed rates right now.

Find a lender who can help you do an assessment of your current mortgage compared to what you could get if you refinance. Do a little research online, and take advantage of the many mortgage payment calculators there are out there to help you figure out if refinancing into a fixed interest rate is the right thing for you to do.

One thing you might want to consider before refinancing into a fixed interest rate mortgage is how long you plan on staying in your house. If you know you will be moving out of your house in 3-4 years, then you may want to opt for something called a hybrid loan. A hybrid loan is one that has a lower, fixed rate for the first few years of the loan, and then afterwards it converts into an adjustable rate mortgage. This way, you could pay a lower interest rate and then sell your house before the higher rates kick in. If however you know that you will be staying in your house for the long haul, then you probably want to refinance with a fixed interest rate. Again, it is best to consult with your lending professional to determine what the best course of action for you is.

More Articles

View more of our articles here

Latest Auction

Everything Personal Finance in Your 20s and 30s: Erase

US $4.85 End Date: Sunday Sep-05-2010 12:54:25 PDT Buy It Now for only: US $4.85 Buy it now | Add to watch list

Latest Promotion

How to Protect Your Money from the Coming Obama Inflation-Grab

Timely research report shows how to protect your money from the coming Obama hyperinflation. Hot topic and extremely well-researched eBook. Approx. $25 commission per copy. Top five popularity in CB Business/Finance category!

Latest Product Offer

No products available at this time. Please check back soon though as we're constantly updating our product catalog.

Latest Best Seller

Focus on Personal Finance (The Mcgraw-Hill/Irwin Series in Finance, Insurance and Real Estate)

Author: Jack Kapoor
List Price:
Our Price: $90.93

Buy now →

Latest Book Offer

No products available at this time. Please check back soon though as we're constantly updating our product catalog.

Power Station Financial Models.

Power Station Financial Models Membership Website - Project Finance Spreadsheet Ms Excel Models.
www.masterkeypromotions.com

MasterKey Club

Access information products, free advice and business opportunities, across a wide range of interests in the MasterKey Club. You can earn extra cash too. It's FREE to join, so sign-up now.