If you’re just a few years down the road with your Hybrid Adjustable Rate Mortgage, chances are you’re pretty happy with your home loan. Mortgage refinancing Rates from lenders like Amerisave are still at crazy low levels, should you think about that refi now, or wait until your home loan resets?
You might not even be thinking about what happens when that 5/1 or 7/1 Adjustable Rate Mortgage starts resetting. While you’re in the fixed period of your Hybrid ARM (5 years on a 5/1, and 7 years on a 7/1 Hybrid ARM) you’re still enjoying that low fixed rate; however, once you’re outside of the fixed period your loan will adjust every year on the anniversary date.
This isn’t a big deal now, interest rates are still below five percent; however, many industry analysts predict rates will start going up next year. If the going rate is higher when your loan reaches the anniversary date your mortgage will reset and your payment will go up.
Should you take advantage of today’s low refinance mortgage rates and lock that payment down? It really depends on your situation. How long do you plan on staying in your home? Do you have a history of serial refinancing? If you do, you know what I’m talking about. The average homeowner refinances every four or five years. If you haven’t recouped your out-of-pocket expenses before refinancing again, you’re actually losing money, no matter how low your interest rate.
On the other hand the security of a fixed rate mortgage is appealing for many homeowners. If you like living dangerously with your finances, by all means keep the hybrid ARM. If you find yourself more financially conservative there is no better time to refinance.
You can learn more about ditching your Hybrid ARM without paying unnecessary lender fees or markup by checking out my free Underground Mortgage Videos.