In recent years homeowners had little choice when refinancing their loans beyond the traditional 30 year fixed interest rate mortgage. Today, Adjustable Rate Mortgages offer a variety of choices for every financial situation. Personal finances in the United States are different today than in the past; homeowners move and change jobs much more frequently than before.
Traditional mortgage loans no longer meet the needs of many homeowners. In addition to offering greater flexibility, Adjustable Rate Mortgages offer lower interest rates than their fixed rate counterparts. Here are several reasons for choosing an Adjustable Rate Mortgage when refinancing your home loan.
1. You plan on moving soon.
2. The change in your financial situation is only temporary. Hybrid Adjustable Rate Mortgages offer the savings of and Adjustable Rate Mortgage plus the safety of a fixed rate loan.
3. You’re counting on higher income in the future. If you know a promotion or a better paying job is on the horizon, refinancing with an Adjustable Rate Mortgage could help you bridge your finances until that higher paying job arrives.
4. You’re a real estate investor that fully understands the risk of an Adjustable Rate Mortgage loan. Investors flipping houses benefit from the lower payments offered by Adjustable Rate Mortgages.
If your Adjustable Rate Mortgage is scheduled to reset soon you might consider refinancing before this happens. You have the option of choosing a fixed rate mortgage or another Adjustable Rate Mortgage. Refinancing with this type of loan allows you to take advantage of the introductory period while avoiding higher payments when your loan resets.