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If you are like a lot of homeowners, you just may be the proud holder of an adjustable rate mortgage (ARM). Over the past few years, many homebuyers and those who refinanced their homes locked into an ARM as the interest rates were significantly lower than the fixed rate mortgages. Now many of those ARMs' lock periods are running out and a substantial rate increase may be in your future.
I suggest that if you do have an ARM, get out your closing paperwork and look into when that adjustment will occur. Then I suggest you ask yourself a few questions to determine if a refinance to a fixed rate mortgage may be right for you.
The first question you need to ask yourself is: How long do you plan to own the real estate with the ARM. If you know for a fact that your ownership will last two or less years then there is a very good possibility that a refinance would not save you much, if any, money. Since a refinance of a mortgage does have some costs, those costs may not be offset by the short time you will own the home.
Another question to ask yourself is: Do you have other debts that can and should be rolled into a new fixed rate mortgage? Many homeowners have an even higher-rate second mortgage or home equity Line of credit (HELOC). Consolidating the two mortgages, not only gets your monthly payment stabilized, but reduces your monthly out-of-pocket expense.
Then there are those of you who have car loans, credit card debt or other high interest payments that can be incorporated into a new fixed rate mortgage. And you always need to remember that the interest paid on a mortgage is tax deductible where a car or credit card loan interest is not.
Another question to ask yourself is: Will an interest only mortgage save money on your monthly mortgage payment. Many homeowners, especially older homeowners, wonder why they should pay the mortgage down as it only increases the monthly payments. Many seniors have decided to look into either interest only mortgages or reverse mortgages as they want to enjoy the cash today instead of having the tax man take it from the estate.
My best suggestion for all of you who have an ARM is to dig out your mortgage paperwork and call me. An appointment can be set up, and you can learn firsthand if a refinance can, and will, save you money. If a refinance will not work for you, then at least you will know the answer. So put off procrastination and get on the phone.
Bob Kieber can be reached at (970) 262-1199 or at rkieber@comcast.net. He is a local mortgage lender and principal of Resort Lending.
I suggest that if you do have an ARM, get out your closing paperwork and look into when that adjustment will occur. Then I suggest you ask yourself a few questions to determine if a refinance to a fixed rate mortgage may be right for you.
The first question you need to ask yourself is: How long do you plan to own the real estate with the ARM. If you know for a fact that your ownership will last two or less years then there is a very good possibility that a refinance would not save you much, if any, money. Since a refinance of a mortgage does have some costs, those costs may not be offset by the short time you will own the home.
Another question to ask yourself is: Do you have other debts that can and should be rolled into a new fixed rate mortgage? Many homeowners have an even higher-rate second mortgage or home equity Line of credit (HELOC). Consolidating the two mortgages, not only gets your monthly payment stabilized, but reduces your monthly out-of-pocket expense.
Then there are those of you who have car loans, credit card debt or other high interest payments that can be incorporated into a new fixed rate mortgage. And you always need to remember that the interest paid on a mortgage is tax deductible where a car or credit card loan interest is not.
Another question to ask yourself is: Will an interest only mortgage save money on your monthly mortgage payment. Many homeowners, especially older homeowners, wonder why they should pay the mortgage down as it only increases the monthly payments. Many seniors have decided to look into either interest only mortgages or reverse mortgages as they want to enjoy the cash today instead of having the tax man take it from the estate.
My best suggestion for all of you who have an ARM is to dig out your mortgage paperwork and call me. An appointment can be set up, and you can learn firsthand if a refinance can, and will, save you money. If a refinance will not work for you, then at least you will know the answer. So put off procrastination and get on the phone.
Bob Kieber can be reached at (970) 262-1199 or at rkieber@comcast.net. He is a local mortgage lender and principal of Resort Lending.
