Refinance Philosophy for those with ARM loans

In today’s chase for the best rate, for those who have a *conforming Adjustable Rate Mortgage or to be more specific a loan owned by Fannie Mae or Freddie Mac the chances are your ARMs interest rate has been going down and is lower than today’s fixed interest rate loans. If you want to get out of the uncertainty of an ARM and want a fixed rate loan have you a decision to make. More than likely to make the move to a fixed rate loan your rate is more than likely going to be higher and therefore your payment is going to go up. Now the challenging aspect is going to be timing. You want to take advantage of your lower rate as long as possible yet when you make the move to a fixed rate loan you want to lock in at the lowest rate you can. Timing the market is always a tough call and trying to guess when the 30 year fixed rates are going to reach their lows is even more difficult given the challenges in the markets today. Unless there is another sizable drop in the market we might have seen the all time lows and rates are starting the trend back up. Now could be the time to start watching the rates to try to catch them on a dip and get locked in, in the upper 4%’s to low 5% range, at this time 4.75% or lower doesn’t appear to be in the stars; unless you buy the rate down (not usually money well spent unless paid by some else). So what I recommend is that we start crunching the numbers now to determine a strategy and to be at the ready when rates get to your sweet spot. To sign up for my rate quote click here.

* Non conforming loans such as subprime loans or portfolio loans (some institutions keep their loans) are probably seeing their rates go up and are not eligible for loan programs created by Fannie Mae and Freddie Mac.