If you’re considering taking advantage of today’s low refinance mortgage rates with the best mortgage lenders like Amerisave, you might want to take another look at Adjustable Rate Mortgage (ARM) loans. Interest rates for ARM refinancing have dropped below three percent and it’s actually cheaper to refinance than to allow your ARM to reset. Here’s an article by Dan Green of the Daily Mortgage Reports.com with several reasons for considering mortgage refinancing with an adjustable interest rate:
If your adjustable-rate mortgage is in its adjustment phase, refinance it. For the first time since last decade, new ARM teaser rates are lower than the rates on adjusting ones.
It’s true that fixed rate mortgage refinancing is the most popular option right now due to the security you get from locking in your payment amount; however, if you know you’re going to moving Adjustable Rate Mortgages could save you a lot of money in the short-term.
In fact, according to Dan, Adjustable Rates are so low right now mortgage refinancing is cheaper than letting your ARM reset. Dan goes on to explain how ARM rates are based on the LIBOR index, which with all the turmoil in the European economy is rising.
One thing Dan points out is that it’s half a point cheaper to refinance with a new Adjustable Rate Mortgage than to let your existing ARM reset; however, one thing he doesn’t take into consideration is discount points, the loan origination fee and any lender closing costs.
How good of a deal you’re getting when mortgage refinancing depends on how much you’re paying to close on that low refinance mortgage rate. Remember you’ll be required to pay lender fees and a mortgage loan origination fee to whoever arranges your refi. If your lender requires discount points to qualify that’s another fee coming out of your pocket.
It’s important to break even recouping your out-of-pocket expenses from mortgage refinancing or you’ll be losing money no matter how low interest rates drop. You can learn more about paying less for mortgage refinancing by avoiding unnecessary fees and markup by checking out my free Underground Mortgage Videos.