Converting an ARM Mortgage to a Secure Fixed-Rate Loan
Converting an adjustable rate mortgage (ARM) into a secure fixed-rate loan has several benefits for owners. Many prospective homebuyers opt for an adjustable rate mortgage when they first buy a property. These loans have an interest rate that’s tied to larger interest rate trends. Early in the life of the loan, payments are lower and can help buyers qualify for larger properties. It’s also a popular choice for buyers who don’t plan to live in a specific location for long. But often, homeowners want the security of a stable mortgage payment over the entire life of their loans or to take advantage permanently of today’s lower interest rates. Here’s a closer look at what’s involved in converting an ARM to a secure fixed-rate mortgage.
Advantages and disadvantages of ARM financing
As explained above, there are a number of advantages to ARM loans. In many cases, the lower initial payments allow buyers to qualify for financing. In some cases, it’s also a gateway product that allows buyers to establish a history of paying their mortgage and achieving a better overall credit score. Ultimately, the goal is to refinance when possible. In particular, many homeowners think about refinancing when mortgage interest rates are low. Now, for example, lenders are seeing many refinancing applications from ARM loan holders that are interested in shifting to a fixed-rate product because long-term fixed mortgage rates are highly affordable.
Getting the process started
If you’re considering refinancing your variable rate mortgage, contact a qualified lender to discuss your options. It’s helpful to consider the details of your current loan, current interest rates, and whether financially it makes sense to refinance. A lender can help you understand alternate financing products on the market as well as what the current rate structures look like.
If you opted for an adjustable rate mortgage product due to your broader financial situation, your lender can look at your current credit score and overall financial position. With this information in mind, it’s easy to assess which products might be a good fit for you now. Often, the savings over the life of the loan are enough to encourage homeowners to refinance. But each mortgage transaction is a highly individual process and should be customized to your needs and particular situation.
Are you a homeowner in the greater Las Vegas area who is considering refinancing an adjustable rate mortgage to a fixed rate product? Contact Sydnee Johnson today to arrange for a personalized mortgage consultation.