About Government Refinance and Home Purchase Programs

Information and Updates on Government Mortgage Programs
Filed under Government Mortgage Financing Programs News

Mortgage interest rates started increasing about a month ago and have yet to stop their ascent. For folks who are currently in adjustable rate mortgages (ARM’s) and intend to continue owning their home for years to come, the time might finally be here to get into a fixed rate mortgage.

The value of ARMs

Adjustable rate mortgages got a bad rap after the housing crash. Too many borrowers got into adjustable rate mortgages without fully comprehending how much their payments might increase when the rates started adjusting. But the truth is ARM’s are a terrific tool for folks who intend to own the home for only a few years. For those owners there is no reason to pay a premium for a 30 year fixed rate when they fully intend to sell in 5-7 years.

Milking the low rates

Huge numbers of borrowers in the U.S. are currently in adjustable rate mortgages that already started adjusting. In many of these cases these borrowers discovered that when their loans started adjusting their payments dropped over the last few years as a result of the federal government compressing mortgage interest rates. For those borrowers it hasn’t made a lot of sense to refinance into a fixed rate because doing so would increase their payments.

But this jump in rates in the last month might mean those record low rates will be a thing of the past. Rates are still very low by any historical measure, but they are up 0.5-0.75% since April.

The time has come

If you are in an ARM now and intend to own your home for several more years contact us in the sidebar right away. There is no telling how much higher rates will go as the economy continues to improve. Rates are still near the all time lows so now is the time to lock in a low fixed rate.

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