If you know you will be selling your home and retiring in seven years or less, you could stuff an additional $12,000 or more into your IRA or 401(k) by getting an adjustable-rate mortgage.
· What Should I Consider Before Refinancing? Before you’re ready to refinance, there are several things you need to think about, including the following:. An adjustable rate mortgage (ARM) is a loan with a 30-year term with a low teaser rate that stays fixed for a period of time – typically five, seven or 10 years – before it adjusts up.
If you’re buying a house soon, you may be mulling over the idea of getting an adjustable-rate mortgage. Or you were, until you heard the Federal Reserve’s recent decision to raise interest rates a quarter point. That likely put a chill on many homeowners’ desire to have an adjustable-rate mortgage, also known as an ARM.
When you take out an ARM today, it won’t be a purely adjustable rate. Instead, you’ll be offered a hybrid ARM. "These are loans which start with a fixed rate for a specific period, such as three, five, seven, or 10 years," says Joe Parsons, senior loan officer at PFS Funding in Dublin, CA .
If you have an adjustable-rate mortgage, refinancing should definitely be considered, because rates will inevitably go up from these record lows. (freddie mac predicts 30-year fixed mortgages will be.