According to a recent survey of mortgage lenders in the United States, nearly 25% of mortgages currently on the books have adjustable interest rates are due for an interest rate adjustment within the next 24 months. Nearly $400 billion in mortgage debt will have an interest rate increase this year. This means monthly payments for many homeowners will increase significantly.
If you are a homeowner with an Adjustable Rate Mortgage that is due for adjustment you may want to start considering your mortgage options. If your budget is already tight, refinancing to a fixed interest rate mortgage could save you future headache.
Even if your Adjustable Rate Mortgage is still lower than fixed rate mortgages, what happens when the Federal Reserve resumes short term interest rate hikes? Many homeowners refinance because they are planning on staying in their homes for a long period of time and want the security of a fixed payment amount. Many believe mortgage interest rates will continue to rise under the present Administration and do not want to risk having their payments go up as well.
Many homeowners refinance their Adjustable Rate Mortgages to take advantage of fixed interest rates and consolidate other high interest debts. If you have an Adjustable Rate Mortgage know you could cash out equity and consolidate your credit cards, student loans, and car payment into one low interest payment.
Mortgage interest rates are still at historically low levels; many industry experts believe mortgage interest rates will return to those levels as the economy is declining. Taking out a 7% fixed rate mortgage now to replace your adjustable rate mortgage is better than a 8-9% refinance early next year.