Refinancing Your Adjustable Rate Mortgage
A large percentage of home buyers who purchased their homes between 2002 and 2005 did so with an adjustable rate mortgage (ARM). The rates on ARM loans during that period were extremely tempting, which is partly what led to the large number of homeowners who are currently refinancing ARM loans.
The Obvious Reason for ARM Refinancing
The reason so many people are refinancing ARM loans is simple. When these people (perhaps including yourself?) first took on their mortgage loan, it was set at a very favorable rate. After all, that’s the whole lure of the adjustable rate mortgage. But many of those ARM loans are now adjusting, or resetting, to higher interest rates. And this significance of this interest rate increase has caught a lot of homeowners off guard.
Thus, we are seeing a spike in home foreclosures … and a decline in adjustable rate mortgage applications … and a rush to refinance ARM loans among many homeowners.
Do you have an adjustable rate mortgage loan? Have you been wondering if it’s a good idea to refinance your ARM? If so, the following articles will be of help to you: