Refi Home Mortgage Loans How Soon Can You Refinance An Adjustable Rate Mortgage

Refi Home Mortgage Loans – How Soon Can you​ Refinance An Adjustable Rate Mortgage?
Homebuyers have several loan options .​
Hence,​ purchasing a​ new home has never been easier .​
Individuals who cannot afford a​ down payment or​ closing costs may take advantage of​ loan programs that offer assistance .​
Furthermore,​ those hoping to​ obtain a​ low rate mortgage may consider a​ loan with an​ adjustable rate .​
Because of​ the​ initial low cost of​ adjustable rate mortgages,​ monthly mortgage payments are also lower .​
However,​ low rate mortgages are short term .​
To avoid an​ interest rate hike,​ homeowners should refinance before rates begin to​ increase.
Advantages of​ Adjustable Rate Mortgages
There are several advantages to​ accepting an​ adjustable mortgage .​
For starters,​ a​ low rate mortgage allows buyers to​ purchase pricier homes,​ while maintaining an​ affordable monthly payment .​
Moreover,​ because of​ record low rates,​ homebuyers who obtain an​ adjustable rate mortgage can enjoy falling rates without refinancing their mortgage .​
Thus,​ they avoid closing costs and other fees.
Adjustable rate mortgages are also ideal for individuals who plan on​ moving in​ a​ few years .​
Some people enjoy the​ stability of​ living in​ one place for many years .​
In this case,​ refinancing for a​ fixed rate is​ a​ wise choice .​
However,​ if​ you​ prefer the​ flexibility of​ moving every three to​ five years,​ you​ will save money with an​ adjustable rate.
Pitfalls of​ Adjustable Rate Mortgages
While adjustable rates offer many attractive features,​ one major drawback is​ that low rates are temporary .​
If interest rates continue to​ fall,​ you​ will not be subjected to​ the​ dangers of​ these loans .​
However,​ if​ rates begin to​ climb,​ so will your mortgage payment .​
Homebuyers who cannot afford an​ increased mortgage are at​ risk of​ losing their home .​
Thus,​ if​ your goal is​ to​ remain in​ your current home for many years,​ refinancing for a​ fixed rate will offer predictable mortgage payments.
How Soon Can you​ Refinance a​ Mortgage?
Fortunately,​ home mortgage loans can be refinanced whenever you​ like .​
Some lenders suggest allowing the​ loan to​ mature at​ least 12 months .​
However,​ if​ you​ detect a​ change in​ market trends,​ refinancing shortly after purchasing your home is​ a​ smart maneuver .​
Those contemplating refinancing must be prepared to​ pay additional closing fees .​
Moreover,​ contact your current lender and inquire of​ prepayment penalties.

You Might Also Like:

Powered by Blogger.