The recent rise in interest rates is turning home mortgage customers edgy. With mortgage companies beginning to hard sell fixed rate mortgages, you might get tempted to switch your ARM to a fixed rate mortgage.
However, before you take that decision, you need to consider a variety of factors that will enable you to evaluate if your switch will be profitable or not.
Factors that one needs to evaluate:
- How long you intend staying in your house
- The current interest rate on your mortgage
- When will that rate begin to adjust and how high can it go
- Rates on competing products
- Whether your loan carries a prepayment penalty
If you do not intend staying long and plan to sell your property, it may not be worth making the switch. A detailed analysis of these factors will help you take the best decision.
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