i have 5.5 years left on my 7/1 arm. My rate is 6.0%. How will i know when it's a good time to refianance?

Question

i have 5.5 years left on my 7/1 arm. My rate is 6.0%. How will i know when it's a good time to refianance to a 30 year fixed. I should do that before my 7/1 comes due beacuse i believe the rates will ultimately rise higher. Can someone give me advise and their predictions. when should i refienance?

Answer 1

Wait the full 7 years. You may not want to even live there by then. If it is getting close to the seven years being up and you feel like rates are going to rise at that time, then make a move. You aren't even close to having this decision though as a 30 yr fixed is more than what you are paying now. Just sit back and enjoy the ride for now. Think of this.....you spend $4000 in closing cost to refinance now when you can't improve your rate. You are paying the same payment you would have been, but your principal is now $4000 higher to fit in all those costs. You get a better job and want to move in 3 yrs. That $4000 is wasted. You can't control what rates will be in 7 yrs. They may be more, or they may be less. You were willing to take that risk when you first signed on the loan.

Answer 2

First, you should have a valid reason to refi - for example - if your rate is going to adjust in a few months that would be a valid reason to refi or you had some unexpected expense and needed the extra money - Before you refi you need to make sure there isn't a pre-pay penalty on your loan - Rates are a little higher now, so unless rates are at least a point (1%) under your current rate - I would not recommend doing anything until you are within 6 months of the adjustment period. So in your case another 5 years - Remember you had to pay money to get the into your current loan - if you refi too soon any savings that you might realize in your present loan may turn into negative dollars.

Answer 3

The question you need to ask yourself is how long you plan to stay in the home. National average is below 7 years at this point. With that said if you plan to be in the house for a period shorter than the fixed period of your loan you should stay right where you are. If you plan to be there longer you should weigh the closing costs against the increase in interest you expect to pay or are currently paying over the time period you maintain the current / new loan. There is no real way to accurately forecast what rates will do. The economy is volatile and the housing market is in the dumper. I suggest you go to www.hsh.com and read their forecasts. This site will also assist you with many other questions about your current and potentially new loan.

Answer 4

Rates are not too bad right now....try locking in a 30-year fixed rate loan.....they're about 6.15-6.25% currently for good credit ratings...this can vary some based on your individual credit rating.....it is always the best and safest way to go...fixed-30-year! Lots of people get duped into financing through an ARM program....then wait too long to refinance by then they are paying at the higher rates.

Answer 5

Now!! I just locked a 15 year fixed rate @ 5.625%. 30 year fixed was @ 6.0%. This of course is for a 680+fico, full documentation and a Loan to Value of 80%. If this is your scenario feel free to email me, good luck!!

Answer 6

I am a Certified Mortgage Planner in Maryland and my partner and I deal with this sort of question all the time. Honestly there is no easy answer to this question. What you need to do is contact a professional and let them run some numbers for you, give you a few different proposals. They should be able to give you an honest answer after looking over your whole financial situation and what your future goals are.....how long you plan to live in the home......years to retirmement......etc...Just make sure that you talk to someone to trust, not someone who is just trying to close you.

Answer 7

NO way! I even have labored as a private loan mortgage officer and it sounds like somebody is attempting to offer you a uncooked deal. first of all, overlook the 50 3 hundred and sixty 5 days fastened fee mortgage. in case you borrow for that era, you would be paying off interest purely for 25 years! And with the bubble on the verge of bursting, the cost of your homestead would desire to slip under what you borrowed, then you definately'll have not got any selection yet to be caught in that mortgage till the value rises lower back. specific, you will get a greater effective fee for a 50 3 hundred and sixty 5 days mortgage, yet you would be paying often interest for the time of your own loan! meaning you will desire to have much less fairness once you go with for to sell or refinance lower back down the line. As for ARM loans, i don't propose them. reason being that for the period of two years it is extremely not likely that your credit would have replaced adequate to develop your place. In 2 years you are able to guess on the reality that your APR will leap (alongside with your month-to-month fee). undesirable information in case you are able to not get out of that 2 3 hundred and sixty 5 days ARM, by using fact then you definately would be caught, or would desire to pay final fees on an completely new mortgage which will by no skill be a lot greater effective. it is what i desire to propose: get a fastened fee mortgage. purely get a private loan this is 30 years or much less. There are places obtainable which will make out the mortgage for you, yet don't be lazy, you are able to desire to discover them. in any different case, you would be making money that do not something in the direction of reducing your own loan quantity. in case you are able to not have adequate funds a 30 3 hundred and sixty 5 days mortgage, you probable should not be getting a private loan in any respect. i will not rigidity adequate which you will desire to evade the 50 3 hundred and sixty 5 days mortgage in any respect fees.

Answer 8

Now would be an excellent time, actually. Fixed rates are right around what you're paying on the ARM, maybe even a touch less.

Answer 9

if you are at 6% ARM right now, you can get fixed rates for right around that in the current market. if you think rates will rise, then unless there is a prepayment penalty clause in your current mortgage, it cant hurt to put out feelers now.

Answer 10

NOW!!!!!!!!!!!!!

Do you read the papers or watch the news?