Mortgage Loans Should I Refinance Now with Rates Increasing?
When rates are rising should you consider refinancing your mortgage loan? When rates are falling this is a moot question. Of course you should consider doing a refinance whether it be a fixed loan or home equity loan. When rates are rising you should, in my opinion, only consider refinancing if you want to take cash out of the equity in your home or if you feel now is the time to lock in a fixed rate.
If the market appears to be on a longer rise, locking in a fixed rate now can save you money in the future. Homeowners with adjustable rate mortgages can rise at the end of the initial low rate ARMs charge for the first twelve months. This currently means your rate can rise 2.75 points or so based on your original agreement. This translates to much higher payments than you currently are paying.
When refinancing, you should take the actual cost of refinancing into consideration. The amount of money you spend to arrange the financing takes time to recoup. Are you planning to live in your property long enough for this to be a wise decision now? If not, I would suggest looking for very low cost...
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