When you signed up for that adjustable rate loan a few years back, it probably seemed like a deal too good to pass up. But fast forward to the present, and you're probably starting to get a little nervous. Every time the Federal Reserve increases interest rates, the cost of borrowing money to buy a home goes up as well. The Federal Reserve's benchmark short-term interest rate has risen to 5.25 percent, from just 1 percent in June 2004.
If you have a 3-in-1 or 5-in-1 arm and the term is coming up, say on January 1st, instead of the four percent you were paying when you got your loan, the rate could increase as much as 2 percent. If say, you borrowed $200,000 at four percent three years ago, your current payments is $954.83. Increase the rate to an even 6 percent on the remaining $189,321.21 you will owe come January, and your payments will increase by $226.51 to $1181.34.
Not too many people can afford to all of a sudden start paying that much more for their living expenses per month. So what are your options? You can either put your house on the market and hope it sells by the end of the year, or swap that fluctuating adjustable rate for a fixed one financed out over the next 30 years.
Not sure where to find the best deal on a mortgage? Log on to www.fastfind.com, fill out a quick and easy form, which includes your contact information, the zip code where your home is located, the balance left on your current mortgage and the type of loan you're seeking, and within one minute, you will be matched with up to four lenders. There is no SSN or credit check needed for this search. And you don't need to have a perfect credit!
The lenders you are matched with will contact you to answer any questions you may have and offer you the best rate. You decide which lenders to go with to begin the application process. In addition to providing the service of linking you with lenders, Fastfind.com also contains a library filled with mortgage information, and calculators you can use to figure out payments.
Don't be caught off guard if the Federal Reserve announces another rate hike. Refinance now!
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