Mortgage Finance Strategy

This blog is about mortgage finance strategy and advice.  With 20+ years of experience, I have worked on thousands of transactions.  I hope to pass along some advice and tips that I have learned along the way that will help optimize your situation.  The blog intends to help with advice, strategy and decision making when diving into the mortgage application process.

Can I Refinance my Fixed ARM Loan?

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Refinance Arm to Arm

Refinancing now is hedging your bets against higher later this year!

Rates are on the rise.  Refinancing from a Fixed ARM to a Fixed ARM can be a successfully strategy in reducing your lifetime interest expenses.

Rates move in cycles that can span months or years.  However, there are always dips!   I generally recommend that within 2 years of a Fixed ARM term ending, that you start aggressively looking for a dip in the market to refinance.  If you are not watching the market daily, then having a partner (loan officer) watching for you is important.   

The risk of ARM loans is that they "roll-off" into an adjustable at the end of your fixed term and then adjust annually.   Taking a similar or lower rate TODAY vs waiting a couple years is a sound strategy!

There are 2 keys to a successful ARM Refinance strategy:

  • 1) Take advantage of interest rate dips when they occur - Act Quickly!
  • 2) Paying no transaction costs with a COST FREE loan. This removes the costs barrier to frequent transactions.

The ARM strategy is even more important when we are in a Federal Reserve rate hike cycle.

The chart below illustrates the strategy.   In the summer of 2016 and Aug 2018, rates were well below the preceding 6 month high and presented a perfect time to jump into another Fixed ARM loan.   The result, Fixed Term extended!

If the Fixed ARM loan you have now will start adjusting within the next 24 months, then give me a call!

By implementing these strategies, you can benefit with the lower ARM rates while maintaining the security of a fixed rate for decades!


About the Author

Bob Rowe

Bob Rowe

For 20+ years, I have successfully advised clients on strategically managing their mortgage.  I am a partner you can trust for the guidance you need with the many mortgages your family will need over the long-term. 

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