While an adjustable mortgage rate (ARM) can be good for many homeowners while the rates are low, when they start rising, homeowners feel the financial pinch. Refinancing this existing ARM loan can save you money. Read about how to refinance an adjustable rate mortgage.

-When you are ready to get a mortgage refinancing, make sure to shop around for the lowest interest rates, and best terms, conditions, and closing costs. The mortgage refinancing industry is an ultra competitive market and you are almost guaranteed to find a lower rate, or better overall loan, the more you look.

-Know your home loan interest rate adjustment times. Typically interest rates will change for homeowners with an ARM. Payments are based on whatever the current rate is, and is then adjusted at certain predetermined times. Most of the time, the intervals are in 3, 5, 6, or even 10 year periods. Rates can be adjusted for better or worse at the conclusions of any of the periods in your particular home loan

-Never forget to calculate for all closing costs and related fees. Sometimes, there are just extremely higher than another comparable mortgage lender. Other times, for homeowners in certain situations like who do not plan on living in the home for much longer, closing costs may actually make refinancing not worth it.

-Check your mortgage, or with your current lender, if there are any prepayment penalties in your mortgage. Generally, there are some type of prepayment fees within the first 3 years of the mortgage. Be sure to make sure that a lower initial rate does not make for a high mortgage interest rate later on when the period expires.

-Try to have interest rate caps included with your refinancing. This will limit the amount of interest rate increased to the caps maximum.

-M Petrone

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