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My ARM is resetting, I have equity and good credit, should I refinace?

I have great credit, at 779. We also have enough equity in the house (owe about $350K but house worth $495K according to zillow). My current rate is 5.25% and ARM resetting next month. Should I refi or should keep the new adjusted rate since I was told it will be less than 5.25%.Please help me decide by davidruiz from Orange, California. Apr 16th 2010 Reply


Shawn Sidhu (shawns)
#245 ranked lender in California - 1 contribution

How long do you plan on living in your current home? Since fixed rates are still at historically low levels it may be ideal to look into a fixed rate especially if you plan on living there longer than 5 years. On the other side of the coin if you plan on moving within 3-4 years you can capture a lower interest rate that what you are currently paying on a 5/1 ARM. Feel free to get in touch to discuss your needs so I can put together some financing options for you.

Apr 16th 2010
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Apr 16th 2010
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Shawn:I plan on living here longer than five years, but should I enjoy todays current low rates and then refinance when they start to rise?

Apr 16th 2010
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Debbi Lachowsky (debbi.lachowsky)
#4 ranked lender in Arkansas - 13 contributions

Depending on the type of ARM you have it could adjust every 6 months or every year. Basically, your current rate of 5.25% is about what the new fixed rate would be if you decided to refinance now. The Note you signed at closing should have an ARM Rider attached to it. Be sure to review this document so you completely understand what the initial interest rate was set at and the terms of adjustment. Generally, the interest rate will not be less than what the initial rate was set at. I think once you have those answers it will be easier for you to determine whether you should refinance now or not.

Apr 16th 2010
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Jim Teak II (jimteak)
#234 ranked lender in California - 14 contributions

Hello--Call Me 24/7/365--Jim Teak II @ 619-293-4200www.JimTeak.com

Apr 16th 2010
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Joe Shamie (Joe Shamie)
#5 ranked lender in New Jersey - 1,412 contributions

I disagree with where your rate may be when it adjusts. You do neeed to takea look ath your loan documents to determine what index your loan is tied to and what the margin over that index will be when the rate resets. You can also call your existing servicer and wthey will be able to provide you with that information.In all likelyhood, your rate will probably decrease when the rate resets and you will be able to enjoy the lower rate for at least a year or six months depending on how often your loan will reset in the future.The problem is that you will be gambling with your ability to fix the rate at a rate comparable or even slightly lower than your current rate. Let me explain. If you allow the current ARM to reset at the lower rate and the interest rate markets start to move higher, as they very likely will, when your rate resets next year, you will probably have a rate higher than what you are cueenebtly paying. Therefore, you should be looking at trying to fix your rate at today's rates as it is unlikely you will be able to get these rates withn the next 6-12 months.I you want to discuss this further please feel free to call me at 877-662-3321 x-102. Joe Shamie

Apr 17th 2010
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- - (Voted.Best.Rates.and.Service)
#11 ranked lender in New York - 374 contributions

I would carefully consider all options. Then I would make a decision that help you to have a secure loan. Rates are really low right now, and it would be advantageous to lock in a fixed rate.Mel Smith- 845-290-3319

Apr 19th 2010
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May 9th 2010
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