Refinancing to An Adjustable Rate Mortgage

When you seek refinancing, you have two options. Either, refinance to a fixed rate mortgage or refinance to an adjustable rate mortgage (ARM). Both types of mortgages can help you lower your monthly rates, but you have to know the difference first.

What’s ARM?

Refinancing to an adjustable rate mortgage (ARM) may be the best option if you want to keep interest costs low. ARM literally allows you to adjust your mortgage rate so it can be affordable to you, hence the name.

Also, if you have plans to sell your property within a few years, then an adjustable rate mortgage may be the best way to refinance. The initial rate that you will be offered for an ARM is usually lower than the rate on a traditional 15 or 30-year mortgage.

Therefore, you would be able to lock in the lower rate and sell before rates start to rise again. Generally speaking, people tend to prefer refinancing to a fixed rate mortgage whenever rates are at a relative low.

Fixed Mortgage Rate

However, if rates fall even lower, a fixed rate mortgage would lock the borrower in at a higher rate. In these cases, it is best to go with an adjustable rate refinance mortgage option.

In any case, you have more than these 2 options to achieve lower monthly payments. Get started today to help get lower rates ASAP.

SHARE
Previous articleWhat is The Minimum Credit Score for a Mortgage?
Next articleReasons for Refinancing a Home
As a blog writer, Jessica gets to mix her passion for creative writing with her love for helping others. As native California resident, she shares her free time with Disneyland, outdoor adventures, and her dog.

1 COMMENT

LEAVE A REPLY

Please enter your comment!
Please enter your name here