If you are thinking of mortgage refinancing then there is one thing you might want to know and that is - you should stay away from ARMs ( adjustable rate mortgages ) ... And if you are wondering why anybody would want to do that, especially since ARMs promise such low interest rates, well here's why ... Adjustable rate mortgages are a great idea when the interest rates are all set to go down for the next several years ... And interest rates go down only when the Government wants to increase consumer spending. Interest rates go down when the Government is looking at ways to stimulate the economy, boost consumer spending ... But you might want to ponder whether this is the case now ... Consumer spending is extremely good and real estate prices are increasing at record growth rates that may not have been seen before. In fact, in some areas the rates are so high that some experts are actually wondering if anyone but the really rich can actually own property there. And if the real estate prices keep increasing at the same or even higher rates for a long time, then possibly only the rich will actually be able to buy any houses in many areas ... And if that happens, the housing markets might actually see steep fall in prices because most of the people cannot afford houses ... and due to this, lots and lots of houses might remain unsold. Would that be a healthy trend then ? If you think it's not, well ... that might be something even the Government might not want that to happen ... And what do they do to prevent very high inflation ... like what is discussed above ? The answer : They increase the interest rates ... And when interest rates increase, adjustable rate mortgages increase too ... and if the interest rates increase significantly, the adjustable rates increase significantly too ... That's possibly why you might want to stay away from adjustable rate mortgages. And what do you choose instead? Well, you might want to consider fixed rate mortgages ... since the possibility of fixed rate mortgages increasing is relatively low. And here is one other thing you may want to do before you consider refinancing, and that is ... Get Multiple Refinance Quotes ... And why would you want to do that? Well, let's say you have 10 refinance quotes to choose from instead of a single quote ... you now get to know what the market conditions are, you now get to see the lowest rate you can have, you now get to analyze the terms much better ... And one happy coincidence of all this is that you may make a much, much better decision about refinancing ... You are actually educating yourself in the process, and saving a lot of money too. And remember - you might want to consider fixed rate mortgages instead of adjustable rate mortgages. |
