Time to abandon your ARM?
Mortgage rates are on the rise. Tales of flippers going bankrupt and generally losing money. The next to go are people with ARM(Adjustable Rate Mortgage) loans.
An ARM loan gives a nicer lower rate at first, but then adjusts down the road. Sometimes it’s a year, sometimes it’s five. While the rates are still fairly bearable, they are on the rise. People who used an ARM to buy more than they can afford are certainly in the high risk category now.
If you have an ARM and a significant increase could adversly affect your budget, consider refinancing now. The rates aren’t going to go down anytimes soon and it may be time to get while the getting is good. 15 and 30 year mortgages still have decent rates and you can lock them in which may make for significant savings in the long run.
Can’t afford the payments on a 15 or 30 year fixed rate mortgage? You bought too much house. Consider downsizing. You may not get the luxuries that you have now, but your wallet will thank you in the long run.
Technorati Tags: arm, arm loan, mortgage, fixed rate, adjustable rate, real estate
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Empty Spaces said,
Wrote on October 18, 2006 @ 10:41 pm
while i agree with you in theory, i think rates are headed back down again.so if you haven’t switch your ARM into a regular fixed, you should probably wait for another 6 months.
just my $2.15 [used to be 2 cents, but i invested it wisely, and now its a wee bit more!]