Mortgage rates are low, but this isn't the first time. Rates have been low in the past. As a matter of fact, between 2003 to 2005, interest rates were extremely low. It was the perfect time to take out an Adjustable Rate Mortgage (ARM)... or was it?
This adjustable rate mortgage made it possible for many buyers to get into a home of their own, and it allowed those homeowners to save thousands of dollars on their first few years of a mortgage. After all, it was probably higher than your rent payment. This was a nice stepping stone from rent, to homeownership without breaking the bank. But all good things come to an end. Many homeowners are now seeing the fixed-rate introductory period of their ARM expiring.
ARMs Can Be Complicated
There are several options, with varying dates of expiration for the initial low fixed rate interest. But they all have one feature in common... the fixed rate of the mortgage expires and homeowners are faced with a new mortgage payment that adjusted to above current interest rates. Even if you can afford the increased mortgage payment, with an ARM loan, you aren't guaranteed that your payment won't increase again with the next jump in interest rates. Some may not adjust again for a year, others every 6 months, and some are even more often. Homeowners find themselves in a precarious position if rates increase, which could mean financial disaster.
So what are the Solutions for Expiring ARMs? With a simple refinance, you can get a LOW fixed rate loan and a mortgage payment that you know will stay the same over the life of your loan. Although you have had an Adjustable Rate Mortgage for a few years, it has probably helped increase your credit scores, thus allowing you to qualify for a great mortgage rate today. In addition, since you have been paying on your mortgage each month, you have been building up your equity. All great qualities when applying for a new fixed rate mortgage today.
Having an Adjustable Rate Mortgage doesn't mean that you have to stay with a mortgage payment that is sky-rocketing. There are many solutions that will make your mortgage more affordable than ever.
Talk with a Mortgage Professional TODAY about your options. Getting a home loan, at a low rate, is still very attainable. Be sure to check out another post about Debunking Mortgage Myths. The post is written about 3 myths that are around today, although very untrue, at least in the state of Texas.
Always available for your Frisco Texas Mortgage needs! John Cannata Reliant Mortgage p# 214.545.5604 Frisco Texas Mortgage Consultant
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