Over the last five to ten years millions of homeowners across America have purchased or refinanced mortgages with adjustable rate ARM loans. Many of these loans are just getting ready for there first rate adjustment and this is getting man home owners to refinance their ARM to a fixed rate.Unfortunately many home owners are for one reason or another just plain unaware of the terms of their home loans and many will be surprised with the first interest rate adjustment notice. And many of these loans adjust every six months to a year, so it pays to know what kind of loan you have.How Do I Know If I Have An ARM LoanIf you think you have an ARM home loan the best way to find out is to grab your closing documents and look over your loan papers. You are looking for something called the adjustable rate rider. This document will explain the terms of your adjustable loan and If you find this in your loan packet you have an ARM. Study this document as it will tell you when your loan is set to adjust and by how muchSwitching To A fixed Rate MortgageIf you have equity in your home and have good credit you are in luck because interest rates are still relatively low. And by taking advantage of these low rates and refinancing into a fixed rate mortgage you will gain stability and in most cases a lower payment then your adjusted ARM required. You will just have to go through the standard refinance process over again which is fairly straight forward.What If I Cannot RefinanceIf however you have no equity in your home or a low credit score and are unable to refinance your ARM loan into a fixed rate mortgage you could be facing some serious hardships. To avoid this you should contact your mortgage lender and try and work out a loan modification with them. If you have always been a reliable customer lenders will often change ARMS that are hard for customers to pay into more stable fixed rate home loans.
More Articles Like This
- Advertisement -