Do you have an ARM product which is set to recast (change rate and payment) in the near future? Depending on who you believe, the Federal Reserve is projected to raise rates 2-4 times this year. And, if so, mortgage rates will typically follow at some point thereafer. So, you may want to consider a longer term fixed program such as a 30 year or 15 year fixed product. Or, if you are planning to sell the home in the short to mid term, refinnacing to another ARM product to ensure a fixed period of payments until you move.
In either case, I can help by asking you questions which will help you see the answer that is best (for you).
Begin by asking yourself how long you intend to stay in the home. One exercise I do with my clients is to ask them to add 5, 7 or 10 years to their current age and then have them ask themselves if they see themselves in this home at that point. If not, then refinancing into an ARM may be worth considering.
If you will only be in your home for the next 5-10 years, you might do well by choosing the 5/1 or 7/1 ARMs. With this option you may be able to save additioal money and increase cash flow when comparte to the 30 year fixed and free up money for other uses.
These ARMs are fixed during the "fixed period" ( e.g. 5 or 7 years) and therefore protect you from market fluctuations.
If you plan to be in the home for the long term, then refinancing to a fixed-rate mortgage might be your best bet. We ahve great information on our Loan Programs section as well as calculators to see how payments compare.
Key takeaway: If you know you’re not going to be in the home 10 years from now, then an ARM loan can provide addtional cash savings as well as a stable payment for the mid term.
Email me or call 415-345-4375 to arrange a consultation. I will take you through your options. We as a banker/broker are able to pull from our portfolio of lenders and investors to provide options that are right for you.