Refinance Options Fixed Rate Vs Adjustable Rate Mortgages

Refinance Options - Fixed Rate vs .​
Adjustable Rate Mortgages
When is​ a​ good time to​ refinance your mortgage to​ a​ fixed rate loan?
The very best time to​ refinance is​ when the​ interest rates are at​ an​ all time low .​
If you're waiting for this option,​ you'll want to​ follow the​ market and keep an​ eye on​ what direction our financial leaders are heading .​
Usually it's based on​ the​ status of​ our economy and there is​ a​ lot of​ discussion about it​ before the​ prime interest rate moves in​ either direction .​
Keep your ear to​ the​ ground.
It's also a​ good idea to​ refinance to​ a​ fixed rate if​ you​ plan on​ living in​ your home for the​ life of​ the​ loan .​
Ninety percent (90%) of​ our population moves to​ a​ new or​ different home for one reason or​ another within 5-7 years .​
But,​ there are those who stay put and want the​ stability of​ steady payments .​
It makes financial planning much easier to​ know for certain how much your expenses are from month to​ month .​
If you​ are one of​ these people,​ your best refinance option is​ a​ fixed rate mortgage .​

By all means.. .​
if​ you​ can't sleep at​ night worrying about the​ ups and downs of​ your mortgage payment,​ then contact a​ good mortgage broker and start the​ refinance process right away .​
It's not worth the​ stress!
When is​ a​ good time to​ consider an​ ARM?
When you​ DON'T qualify for the​ purchase of​ a​ home or​ refinance to​ a​ fixed rate mortgage .​
Sometimes this is​ the​ only way to​ qualify for a​ purchase due to​ credit history,​ debt to​ income ratio or​ not enough income .​
Later on​ you​ can refinance into a​ fixed rate loan if​ the​ ARM loan makes you​ nervous.
When your monthly payment,​ after the​ refinance,​ will be significantly less than the​ total of​ your current payment plus the​ payments of​ all your credit cards and loans .​
If you're in​ a​ home for 5-7 years and you​ are paying 10,​ 15 or​ even 20% interest rate on​ consumer debts,​ refinance your mortgage and use your equity to​ pay off your high interest debts .​
This will make a​ significant impact on​ your monthly cash flow and may give you​ the​ necessary breathing room you​ need.
When you​ DON'T plan on​ staying in​ your home for more than 5-7 years due to​ family size increasing,​ kids going off to​ college,​ job relocation,​ etc .​
Why pay for a​ higher fixed rate long term mortgage if​ you​ are only going to​ move or​ refinance in​ a​ few years anyway .​
Homeowners who refinance with long term fixed rates pay between 1.00-2.00% higher than those who refinance with an​ ARM .​
That may not seem like a​ lot but when you​ have a​ $250,​000 mortgage,​ it​ makes a​ BIG difference in​ your payment .​
When you​ CAN anticipate increases in​ your income due to​ promotions and raises .​
Some employees receive a​ raise each year based on​ a​ percentage of​ their current income and can come relatively close to​ determining what their raise will be .​
If you're due for and expect to​ get a​ promotion,​ you'll probably know ahead of​ time what that new position will pay you​ .​
These are perfect opportunities to​ consider a​ refinance.
When you​ ARE comfortable with moderate adjustments in​ your mortgage payment .​
Some people are just more relaxed about finances than others .​
Most often this is​ due to​ not having to​ worry about their basic survival needs and having a​ steady,​ generous income .​
What it​ all boils down to​ is​ level of​ risk .​
If you​ can't sleep at​ night unless you​ know your mortgage payment is​ $XXX.00 every month,​ then a​ long term fixed rate mortgage is​ the​ best option for you​ .​
If you​ can sleep at​ night taking some calculated risks,​ other options may be available to​ you.
Refinance Options Fixed Rate Vs Adjustable Rate Mortgages Refinance Options Fixed Rate Vs Adjustable Rate Mortgages Reviewed by Henda Yesti on July 03, 2018 Rating: 5

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