Low mortgage rates today may have you wondering if you should refinance your ARM (adjustable rate mortgage) to a fixed rate (conventional) mortgage. There is no better time than now to ask that question. We know that, at some point, mortgage rates will rise, we just don’t know when. A rising rate will affect your adjustable rate mortgage by increasing the interest rate you pay going forward. Here are a couple items that you should discuss with your Nicolet National Bank mortgage lender to determine if refinancing to a fixed rate mortgage is going to benefit you:
1. How long do you plan on living in your current home?
If you are planning on staying in your home for the foreseeable future, it can be a big cost savings to refinance to a fixed rate mortgage now, rather than waiting until the interest rate on your ARM adjusts to a higher rate.
2. What is the rate on your ARM compared to the current rate for a fixed rate mortgage?
Knowing that your interest rate is locked in for 10, 15, 20, or 30 years can give you peace of mind. When interest rates rise, yours is locked in at today’s historically low rates – saving you a lot of money in interest over the life of your loan.
By comparing the rate on your current ARM to a fixed rate mortgage and pairing that with how long you plan to be in the home, you will have a good picture of the best option to take. Call any other Nicolet National Bank Lender to help you determine if converting your mortgage is the best option for you today.