Adjustable rate mortgages were an extremely popular home loan during the mortgage boom. These loans offered lower monthly payments and easy qualification compared to fixed rate mortgages. The boom ended and many homeowners facing adjustments in their loans could no longer afford their payments and could not refinance their loans.
If you are in a similar situation with your adjustable rate mortgage here are a few tips to help you refinance the loan with a mortgage payment you can afford.
Adjustable Rate Mortgage Refinance Tips
Before setting out to refinance your Adjustable Rate Mortgage loan here are several tips to help you avoid potential pitfalls along the way.
Get Started Early
Refinancing before your ARM adjusts and your payment goes up is the best way to go. Getting started 3 to 6 months before your fixed rate period expires could save you from potential headaches if you run into snags getting approved. Put of refinancing too long and you could find yourself with a mortgage payment you cannot afford.
Avoid Another Adjustable Rate Mortgage
If you’re refinancing your existing ARM think twice before getting a similar loan. Fixed rate mortgage rates are still at historically low levels and offer stable monthly payments that you don’t have to worry about. Refinance with another Adjustable Rate Mortgage and you could find yourself in the same uncomfortable situation five to seven years down the road.
Negotiate with the Right Mortgage Broker
Saving money on your next mortgage loan comes down to finding the right person to arrange your loan. Most homeowners overpay because they do not understand the mortgage rate quotes they receive are almost always marked up to give the broker a commission. Find the right broker and you can refinancing your Adjustable Rate Mortgage for a flat one percent origination fee without paying any commission based markup of your mortgage rate. Keep in mind that this markup can raise your monthly payment amount by hundreds of dollars every month; that’s thousands of dollars you’re paying unnecessarily every year!
You can learn more about refinancing your Adjustable Rate Mortgage without paying too much and avoiding common pitfalls by registering for the free mortgage videos found on this website.