Should I refinance my adjustable rate mortgage now?


When your ARM is nearing the end of its term, now is the perfect time to refinance into a fixed-rate mortgage. Here are the steps you need to take to get started. (iStock)

Adjustable rate mortgages (ARMs) have become increasingly popular with mortgage borrowers in recent years. ARMs are a great way to keep mortgage costs down, especially in the early years of the loan.

While ARMs may seem like a big deal, right now, refinancing to a fixed-rate mortgage is actually a better option. With rates at all-time lows, now is the perfect time to set a fixed price so you don’t have to worry about sudden spikes.

Make sure, that Use an online mortgage refinance calculator to see what lower interest rates or longer maturities could do on your mortgage payment. You can also go to Credible to compare mortgage refinancing rates.

This is the best way to lower your monthly mortgage payment

Why you should refinance an adjustable rate mortgage now

Many people have hybrid ARMs, which are 30-year mortgages with an initial fixed low interest rate for either five, seven, or ten years. After the first term has expired, the interest rate is adjusted annually for the remainder of the loan term.

As you near the end of your ARM’s initial term, now is an excellent time to refinance into a fixed-rate mortgage. By refinancing, you benefit from historically low interest rates and bind this interest rate for the longer term.

If you are considering refinancing, You should check out Credible. Credible allows you to pre-qualify and compare rates from multiple lenders in minutes.

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What are the current mortgage refinancing rates?

Mortgage rates have risen slowly over the past month, but refinancing rates remain at near record lows. Depending on the chosen term, you can expect the following Refinancing rates:

  • 30-year fixed rate refinancing: 2.875%
  • 20-year fixed rate refinancing: 2.875%
  • 15-year fixed rate refinancing: 2,250%

Benefits of Refinancing a Mortgage

The number one reason to refinance a fixed-rate mortgage is the stability it offers. With an ARM, your payments can fluctuate, making it harder to plan expenses and manage your money. However, when you refinance a fixed-rate mortgage, the payments remain constant over the life of the loan.

Depending on your creditworthiness and the circumstances, you may be able to make additional changes to the loan. For example, you can shorten your repayment term or lower your monthly payments.

Many people choose an ARM to take advantage of the low interest rates, especially at the start of the mortgage. But right now, a standard fixed-rate mortgage is almost the same as an ARM.

It’s impossible to determine when rates will rise, but some industry experts predict that rates will rise in the next year. Refinancing enables you to take advantage of the benefits bad reviews and save money on your monthly payments.

You should use an online mortgage refinance calculatoras it can help you determine your estimated monthly cost.

YOU CAN REFINE YOUR HOME WITH NO FINAL COSTS – BUT THERE IS A BIG DISADVANTAGE

How to Get the Best Mortgage Refinance Rate

When you refinance your mortgage, you take out a completely new loan. That means you have to pay Closing costs and other fees.

If you’re not careful, these costs can add up quickly and negate many of the cost-saving benefits you would have received from a refinance. So before you decide on a lender, you want to know that refinancing is financially worthwhile.

To find the best mortgage refinancing rates, make sure you shop around and compare lenders. The best way to do this is by using a credit marketplace like Credible. Credible allows you to compare prices from multiple banks and lenders. And Credible runs a gentle loan request for you to get your Mortgage Refinancing Options without having to worry about your creditworthiness being affected.

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Next Steps

There are benefits to taking out an ARM, but now is a good time to refinance a fixed-rate mortgage. Refinancing enables you to secure record-low refinancing rates for the remaining term of your loan.

Are you considering refinancing, but unsure whether this is the right choice for you? When you visit Credible, You can turn to experienced loan officers who can answer your questions and guide you through the refinancing process.

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