Financing in Brooklyn>Question Details

Carissa, Home Buyer in Brooklyn, OH

With a 10/1 ARM, can you refinance before your time is up?

Asked by Carissa, Brooklyn, OH Wed Apr 23, 2008

If we decide on the locked in for 10 years and then adjustable mortgage, can we refinance to a fixed rate or another adjustable 10/1 before those 10 years are up? it's a big savings but scary,....we DO want to stay in that house longer than 10 years, so this isn't necessarily what we want to do, but it woudl save us 34k in payments over the 10 years.

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Yes. You may have a pre-payment penalty within the first two years. Check your mortgage documents to see. After the penalty time is up, look at what your rate is versus what current rates are and when you might be selling. These are important factors to consider. If you have not consumated this 10/1 arm, you might be better off getting a fixed rate now, since they are incredibly low right now. Rates seem to no where to go but up from here. If you have to move when rates are up, then you will be stuck. If you think you will stay put, then you should get a fixed rate.
0 votes Thank Flag Link Wed Apr 23, 2008
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