Finance home re finance mortgage debt consolidating

02-Jun-2019 16:49

It takes years to recoup that cost with the savings generated by a lower interest rate or a shorter term.

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Many homeowners refinance to consolidate their debt.

While ARMs often start out offering lower rates than fixed-rate mortgages, periodic adjustments often result in rate increases that are higher than the rate available through a fixed-rate mortgage.

When this occurs, converting to a fixed-rate mortgage results in a lower interest rate and eliminates concern over future interest rate hikes.

With mortgage interest rates rising, on the other hand, as they have begun to do, this would be an unwise strategy.

Converting to an ARM, which often has a lower monthly payment than a fixed-term mortgage, may be a good idea for homeowners who don't plan to stay in their home for more than a few years.

Many homeowners refinance to consolidate their debt.While ARMs often start out offering lower rates than fixed-rate mortgages, periodic adjustments often result in rate increases that are higher than the rate available through a fixed-rate mortgage.When this occurs, converting to a fixed-rate mortgage results in a lower interest rate and eliminates concern over future interest rate hikes.With mortgage interest rates rising, on the other hand, as they have begun to do, this would be an unwise strategy.Converting to an ARM, which often has a lower monthly payment than a fixed-term mortgage, may be a good idea for homeowners who don't plan to stay in their home for more than a few years.When used carefully, it can also be a valuable tool in getting debt under control.