Okay, so now you’re looking at your mortgage statement and the adjustable rate mortgage that goes along with it. You’ve been thinking for some time now that it’s probably a good idea to switch out from an adjustable rate mortgage or a hybrid and move into the stability of a fixed rate loan. But the interest rate on your mortgage is still very attractive and it’s been good to you for the past few years as rates, in general, have remained relatively low. And on the other hand, you also hear the prudent thing to do is to refinance out of your adjustable rate mortgage and into a fixed rate loan while rates are still low. So what do you do? Which advice is the best for your situation?
It’s not always an automatic when deciding. Yes, if you’re currently on an adjustable rate loan and you’re not sure how long you’ll own the property or you’re pretty definite that you won’t own the home for very much longer due to a job transfer or otherwise moving to another area. In this instance, it’s probably a good idea to stay where you and keep the adjustable rate loan.
However, if you don’t have any immediate intentions of moving and you do intend to keep the property well into the future you really should give some serious consideration to refinance now out of your adjustable rate loan and into a low fixed rate. The Fed has made clear its intentions to gradually increase interest rates over time with no indications there will be rate cuts before rate increases. If this sounds familiar to you, it’s time to speak with your loan officer about making the switch.