Oh, for the days of extremely low interest rates. Mortgage interest rates plummeted during the early years of the decade. In fact, from 2003 to 2005, interest rates were at an all-time low. It was the perfect time to take out an adjustable rate mortgage (ARM).

This adjustable rate mortgage made it possible for many buyers to get into a home, and it also allowed homeowners to save thousands on their first years of a mortgage. But all good things come to an end. With higher interest rates, many homeowners are 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: in time, the fixed rate of the mortgage expires and homeowners are faced with a new mortgage payment that adjusts to current interest levels. For many, this can mean that their mortgage payment suddenly adjusts up several hundred dollars.

Even if you can afford the increased payment, with an adjustable loan you aren't guaranteed that your payment won't increase again with the next jump in interest rates. Many homeowners find themselves in a precarious position if rates increase, which could mean financial disaster.

Solutions for Expiring ARMs

With a simple refinance, you can get a fixed rate loan - a mortgage payment that you know will stay the same over the life of your loan. Read the most frequently asked questions about fixed rate mortgages.

Best of all, you can use your years with an adjustable rate loan to your credit advantage, and you may have built equity in your current home that you can apply to your new fixed rate mortgage.

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.

Contact me for more information about refinancing your adjustable rate loan.