Q: Right now I have a ARM on my mortgage. It ends in April. When do you think I should refinance my mortgage? Do I take the risk of waiting and going to the rate in April or should I refinance now?
A: Is there a prepayment penalty on your current loan? If not, I see no reason not to look into refinancing right now. Even if you do have a prepayment penalty you may need to consider refinancing sooner.
Keep in mind that if home values continue to decline in your areas it may be more difficult to refinance in the future, depending on how much equity you have n your home. Liz Weston wrote an excellent article on this topic for MSN Money. Additionally, we have no idea where rates will be by spring, but by all indications they are likely to be higher.
Use the search feature on Lender Rate Match to find out what loans may be available to you. Then talk with the lender and ask him or her to run a “break even” analysis for you if there is a prepayment penalty. You’ll have a better idea of whether you should refi now or risk waiting.
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