Adjustable Rate Mortgage loans are making a comeback and if you’re in the market for mortgage refinancing should you consider an ARM to take advantage of today’s best refinance rates? There is risk that you need to know about before choosing this type of loan; however, with 5/1 ARM refinance rates below four percent this option is tempting especially if you plan on selling your home within five years. Here’s an article on MortgageLoan.com that explores the pros and cons of today’s Adjustable Rate Mortgage:
Should you consider an adjustable rate mortgage? The flexible-rate loans got a bad reputation when they were associated with the collapse of the subprime mortgage market, but lately they’ve been making a comeback of sorts. That comeback has been driven by one thing – low interest rates. Currently, the average initial rate on a 5-year ARM is only 3.25 percent, according to Freddie Mac, compared to 4.55 percent on a 30-year fixed-rate loan – a difference of 1.30 percentage points.
Once you’ve decided to go forward with mortgage refinancing it doesn’t matter if you choose an Adjustable Rate or a traditional 30-year fixed rate loan it’s important to shop around for lender fees and closing costs to avoid overpaying. One of the most common mortgage mistakes is focusing only on getting the lowest refinance rates and not paying attention to the origination fee or lender fees.
Did you know that all the fees are negotiable and vary from one lender and broker to the next. You can literally save yourself thousands of dollars by shopping around negotiation to pay less for your mortgage refinance. You can learn more about how to do this while avoiding unnecessary fees and markup by checking out my free Underground Mortgage Videos.