Holders of adjustable rate mortgages (ARMs) that are facing a reset (dramatic increase) in their rates and monthly payments should consider refinancing with a fixed rate mortgage loan. Actions by the Fed to cut short-term interest rates should hold mortgage rates low for the next several months.
It is possible that mortgage rates are already nearing their lowest point. Bankrate is reporting that 30 year fixed rates have dropped from 5.42 to 5.31% in one week.
It is also possible that rates may drop a bit more. However, many mortgage industry analysts have stated that rates are near the lowest point and will probably not drop much more.
Getting a fixed rate mortgage could cut your monthly payments and help you lock in the low rate and low payment you will need to keep your home. Otherwise, you may face substantial increases in your rates that could cause your mortgage payments to nearly double.
For more information, you may wish to contact a housing counselor or a mortgage lender. In some cases, your current mortgage lender may be willing to allow you to refinance. You may also wish to consider finding a more reputable lender if your current loan has predatory terms.
Whatever you do, the Fed has made it clear that NOW is the time to do something about your ARM. Take action now to avoid foreclosure later.
Tags: ARM refinance