Refinancing Your Home Mortgage Loan - Refinance Your Adjustable Rate Mortgage
Carrie Reeder
Adding Up Costs
Before you jump on a refinancing offer, consider the upfront costs. To refinance a $100,000 loan, you can expect loan fees to range from $1000 to $3000. That is not including points for lower rates.
In order to recoup these origination costs, you need to be planning to spend several years in your home. Also, if you only have a couple of years left on your mortgage, you may be better off with your original mortgage.
Benefits Of Refinancing
Locking in a low rate is the most common benefit to refinancing an ARM. By converting to a fixed rate mortgage, you are guaranteed a low interest without worrying about yearly interest rate fluxes.
You can also build up your equity sooner by converting to a biweekly mortgage or short term loan. With larger monthly payments, you can potentially save thousands on interest payments.
When Not To Refinance
With an ARM there is always some risk involved, but there are cases when keeping your ARM makes financial sense. For instance, unless interest rates will rise more than a couple of percentage points over the course of your loan, you will probably pay more in loan fees than you will save. You should also keep your ARM if current rates are only 1% or lower than your ARM's rate.
You may also want to keep your ARM if you are planning to move soon. With homeowners moving within seven years of buying a home, it doesn't make sense to refinance when you won't recoup the costs.
Picking A Lender
Just like with any mortgage, you want to be sure that you have researched several lenders before choosing one. Request quotes on both rates and fees. You will need to add up total costs to find the best financing package. You can also use the internet to find online mortgage lenders. Many times these lenders will offer lower interest rates or low closing costs to remain competitive.
About the author:
See my recommended Home Mortgage Refinance Lenders for the lowest rates online. Carrie Reeder is the owner of ABC Loan Guide, which offers help finding low rate home mortgage loans.
The latest information and news on Mortgages:
Former Rock pitchman launches mortgage company of his own (Detroit Free Press)
Best known for years as the pitchman of Rock Financial before a falling-out with his boss, Dan Gilbert, David Hall has launched a mortgage company in Birmingham called Hall Financial.
Former Rock Financial exec David Hall forms mortgage firm (Detroit Free Press)
Best known for years as the pitchman of Rock Financial before a falling-out with his boss, Dan Gilbert, David Hall has launched a new mortgage company in Birmingham called Hall Financial.
Mortgage pain on the increase (Brisbane Times)
The number of households facing mortgage stress has risen to a 16-month high as rising interest rates hit home.
Mortgage broker may face felony charge in alleged assault in Bothell (Seattle...
King County prosecutors are considering filing a felony charge against a real-estate mortgage broker who allegedly assaulted a woman in downtown Bothell last month.
Manhattanite gets 3-9 years in Little Neck mortgage scam (New York Post)
A 35-year-old Manhattan man has been sentenced to prison for having used a forged power of attorney to unlawfully obtain a mortgage on his mother-in-law?s Little Neck condominium and steal more than $300,000, the Queens district attorney said.Shih Siang Shawn Liao, of 300 W. 110th St. in...
Yahoo! News Search Results for refinance
Pernod Ricard Plans to Issue Bonds to Refinance Absolut Buyout (Bloomberg)
March 10 (Bloomberg) -- Pernod Ricard SA , the world?s second-biggest liquor maker, is planning to sell six-year bonds to help refinance loans used to buy the Absolut vodka brand in March 2008.
New Article on Fannie Mae, Freddie Mac HARP Mortgage Refinance Program Availa...
In a new article, AimLoan.com explains why Fannie Mae and Freddie Mac?s program to refinance underwater homeowners should be expanded, as lowered mortgage rates are key to economic recovery. (PRWeb Mar 9, 2010) Read the full story at http://www.prweb.com/releases/2010/03/prweb3690424.htm
New Article on Fannie Mae, Freddie Mac HARP Mortgage Refinance Program Availa...
In a new article, AimLoan.com explains why Fannie Mae and Freddie Mac?s program to refinance underwater homeowners should be expanded, as lowered mortgage rates are key to economic recovery.
Prestige Brands to privately place $150M in notes (AP via Yahoo! Finance)
Prestige Brands Holdings Inc., whose brands include Chloraseptic for sore throats, Murine eye drops and Comet cleanser, said Wednesday it will offer $150 million in senior notes to help refinance debt coming due this year.
Bankruptcy haunts mortgage refinance (Bankrate.com via Yahoo! Finance)
Good credit scores aren't helping a couple overcome an old bankruptcy.
