Is Refinancing in your Near Future?

Having a clear financial objective in mind is extremely important so that you are able to choose the most appropriate loan. Your individual financial situation is going to be your main concern when the time comes to make the decision to refinance.

Refinance from an Adjustable Rate Mortgage (ARM) to a Fixed-Rate

Following the rise and fall of mortgage rates is extremely important. The Federal Reserve has raised interest rates several times since mid-2004 and is expected to keep raising rates in the future. This means that if you have an adjustable rate mortgage (ARM), it may adjust to a rate that's higher than a fixed-rate mortgage. With this in mind, refinancing to a fixed-rate loan might be a smart idea.

You need to consider the amount of time you plan on being in your home. If you’re only going to be in your home for a few more years, refinancing out of your ARM might not make sense. If you’re going to be in your home longer than seven years, then refinancing to a fixed-rate mortgage is probably your best option.

Refinance from a Fixed-Rate Mortgage to an ARM

The time you will be in your home is the most important factor upon making the decision to refinance. Many people move within nine years so it may not make sense to pay a higher interest rate for a 30-year fixed-rate mortgage if you don’t plan on being in your home for that long. Doing so may be costing you money. Consider refinancing to an ARM instead, you will get a lower rate and lower your monthly mortgage payment.