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ARM Mortgage Holders are Refinancing to Fixed Rates
Atlanta, GA (PRWeb) December 4, 2006 -- Katz Mortgage Team, www.KatzMortgageTeam.net, of VanDyk Mortgage Corporation, has announced they are now advising many of their ARM holders to secure a fixed rate mortgage after this recent rate drop.
Just this past week, the US Treasury 10 year Note dropped to 4.4% for the first time in a year. This translates to thirty-year fixed rate mortgages dropping from the high 6% range in July of this year down to the mid 5% range today.
Many on Wall Street feel that a slowing of the real estate market, coupled with higher energy costs have pushed rates down. They also caution that as unemployment stays around the 4.5% mark and the economy starts to heat up, inflation fears will once again push rates in the opposite direction.
During the unprecedented refinance boom of 2002-2003, many homeowners took out 5 year and 3 year adjustable mortgages at historically low rates. Most of these are tied to either the one-year LIBOR or one year T-Bill. Today those loans would adjust to rates in the 7.5 to 8% range, which means that many homeowners could see mortgage payments rise 25 to 40%.
Stephen Katz, of Katz Mortgage Team states, "Many of our clients took advantage of the super low ARM rates of 3 and 4 years ago and have saved a tremendous amount of money. But now we urge these homeowners to take a look once again at refinancing to a more stable fixed rate. If a family plans to stay in their current home for more than two years, or if they plan to keep it as a rental, now is the perfect time to switch horses and go back to a fixed rate."
In today's mortgage marketplace, there are a number of fixed rate terms as well as fixed rate interest-only options that help keep payments low at a constant interest rate. Borrowers can choose to get the lowest rate possible or may prefer to go with a zero closing cost loan.
"Today there are at least a dozen ways to package up a fixed rate mortgage loan", Katz states. "Our advice is to spend some time discussing your entire financial situation with a trusted mortgage consultant. How long do you plan to stay in the house? What other debt do you have? Are you concerned about the payments? These are just a few of the questions that need to be asked to determine the best new loan."
Katz reiterates, "We are in this tenuous window of opportunity with rates. If one has a 3 or 5 yr ARM, a low fixed rate may be the best Christmas present they get this year."
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