Many homeowners have been rushing to refinance their Adjustable Rate Mortgages (ARMs) into a Fixed Rate Mortgage, mostly out of fear. 

While it is true that many ARMs adjusting this year will put homeowners into increased mortgage payments, some of which they will not be able to afford.  However, I am approached by many ARM holders who want to refinance and they have a while, sometimes a couple of years, before their ARM adjusts.  Should they follow the herd?

The answer is a definitive NO!  Sounds strange coming from someone who makes money selling mortgages, doesn't it?  Well, the reality is that the Fed is likely to start a rate cutting trend today.  Typically this lasts for a while and leads to a lower LIBOR index as LIBOR tends to track reasonably close to what the Fed does. 

So, if your ARM is not adjusting for a while, you may see it adjust to rates comparable to today's fixed rates, possibly even lower, by the time it does adjust.  So, if you are near or below today's current fixed rates, then why worry?  Take advantage of the current savings you may be receiving for a while and see how things play out. DON'T BE AFRAID!

So, if you are fearful of where your mortgage rate is headed, that is understandable and fine.  But taking action based on emotions typically leads to disaster, so take a step back and find a mortgage professional that came help you analyze your situation properly and help you make an educated decision.