If you have an ARM home loan that is currently approaching the point in time where the fixed rate expires and the new adjustable rate takes affect you can expect higher house payments very soon. With this in mind you may want to take advantage of an adjustable to fixed rate refinance in order to lower your payments and give yourself some financial stability.
Why Your ARM Is Dangerous To Your Finances
An ARM loan that resets often has a interest rate that will increase by one or two percent and that can make your payments increase by hundreds of dollars. This is something many people are not ready for when it happens often times the house payment can become very difficult to pay. Having your budget blown because of a higher house payment is not a pleasant thing to have to go through!
Is a Fixed Rate Easy To Get
Even with the recent mortgage and credit crunch fixed mortgage rates are very low. This makes the option of refinancing your adjustable rate loan into a fixed rate loan very appealing. Compare this to adjustable loans that are tied to indexes that have been slowly increasing, this means higher mortgage payments for people with ARMS. However you will need good credit to refinance your ARM, if you do not you may have to work something out with your mortgage lender.
When Should I Refinance My ARM
If your adjustable rate mortgage is getting ready to adjust soon the first step you should take is to contact a mortgage broker or bank within thirty days of the rate increase.
By contacting a mortgage company early you will give yourself enough time to refinance and not have to worry about making the higher payments. And if your lender can time the closing right you maybe able to skip two months mortgage payments.
If you call them after your loan adjusts you may have to make a higher payment or two. If you are having trouble making this payment do not let it go thirty days late, if it does you may lose your ability to refinance your adjustable loan into a lower more stable fixed rate.
If you are thinking of refinancing an ARM To Fixed Rate then you need the tips available at http://www.adjustablemortgageinfo.com
