Change to a Fixed Mortgage
Converting Your ARM to a Fixed Rate
Home owners have two rate options when refinancing their home loan, fixed rate mortgages and adjustable rate mortgages, often referred to as ARMs. ARMs are attractive in today?s economy because they offer very low introductory rates but due to financial market instability these rates can jump quickly and homeowners may find themselves paying more than they had bargained for. Adjustable rate mortgages are not always unpredictable though. Homeowners who know the length of time they plan to stay in their home may secure an ARM for that specific amount of time, which will save the homeowner money and avoid rising payments.
Moving to an adjustable-rate mortgage to a fixed-rate mortgage will not only give you peace of mind, it may even save you money in the long run. Though no one can accurately predict if rates are going to go down later (though many have tried), today’s low rates make it attractive for those with adjustable-rate mortgages to refinance to fixed-rate mortgages.
Here are the main reasons why you may like to move from an adjustable rate to a fixed rate:
- You’ll know exactly how much your monthly payment will be for the life of your loan, regardless of what happens in the market
- Guard against possible rate hikes; after the initial low-rate period of an ARM ends, you’re susceptible to a fluctuating market and could have to pay higher monthly payments
- If the property values in your area are dropping, you may want to refinance to a fixed-rate mortgage now to protect your investment
Ready to move to a fixed-rate mortgage? Give us a call at 310-348-7878 and we’ll get you started on the switch.