CONVERTING AN ADJUSTABLE-RATE TO FIXED-RATEMany homeowners start out with ARMs (Adjustable Rate Mortgage) as an attempt to keep their monthly payments low. This is great early on, but over time, that interest rate will adjust. More often than not, the adjustment is higher, not lower. Naturally, there are many factors that will influence how much your interest rate can adjust per adjustment period. However, many home-owners prefer the unchanging nature of a fixed-rate mortgage if they intend to remain at their current home long term.
With that said, in a falling rate environment, an ARM can offer you the chance to potentially tap into a lower rate for each adjustment period – Meaning your monthly payment would drop. Since there are multiple factors and influences at work here, it’s highly recommended you speak with a qualified mortgage professional to analyze your current situation, and compare with the current mortgage rate environment to see which option would work best for you.