Relocating Soon? Refinance Now!

“I’D LIKE TO REFINANCE TO TAKE ADVANTAGE OF THE LOW INTEREST RATES, BUT I’M MOVING IN THREE YEARS (MY COMPANY IS RELOCATING TO ANOTHER STATE). IT WOULDN’T MAKE SENSE FOR ME TO REFINANCE NOW, WOULD IT?”

If you know you’re going to be moving in three years, you can definitely take advantage of the low interest rates now by refinancing your current mortgage into an adjustable rate mortgage (ARM) such as a 5-year ARM. For example, with a 5-year ARM, you will get a lower interest rate and a lower monthly payment for the first five years of the loan. After that five-year fixed rate period, the loan will adjust, but you’ll no longer have that loan—as long as you do follow through and sell your home within that five-year timeframe, of course. Plus, with the lower monthly payments of a 5-year ARM, it may be a bit easier to save up for the down payment on your new home or you could use the savings for new home furnishings, renovations to the home you’re selling, etc. Many lenders also offer similar loans such as a 7-year ARM or even a 3-year ARM, although the 5-year ARM is the most common. Although adjustable rate mortgages aren’t the solution for every borrower, they can be the right loan for you if you know you’re not going to have that loan when it adjusts. ∆