If your adjustable rate arm mortgage is about to reach the end of it’s fixed period, you may be able to avoid paying substantially higher mortgage payments by refinancing your adjustable rate mortgage and converting to a fixed rate mortgage. A fixed rate refinance is a very popular option, and if you have equity in your home you may be able to refinance into a secure fixed rate with little to no out of pocket cost.

Adjustable rate mortgage (arm) interest rate will increase after the initial period. You should consult with a mortgage broker to analyze the cost savings of refinancing at this point.

When evaluating your adjustable rate mortgage during an adjustment period review the following loan documents: note and rider. Your note will outline the terms of your mortgage. It will indicate your rate and the terms of your loan. If you have an adjustable rate mortgage your loan documents will have an adjustable rate mortgage rider. This rider will outline the index, the margin, and the terms of the adjustment.

When refinancing before the rate increases on your arm / adjustable rate mortgage, it may worthwhile for you to evaluate your options, for example obtaining a mortgage with flexible minimum and/or interest only payments, or consider taking cash out of the property to separate it from the equity or consolidate debt.

The initial rate for an arm mortgage is fixed for an introductory period ranging from one month to 10 or more years. Most adjustable rate mortgages have a fixed, or teaser period of two or three years (2/28 or 3/27 are the industry terms for these arm loans). After the arms introductory period expires, the rate on your arm may increase. If you took out your arm mortgage in the past 5 years, you can safely assume that your new adjustable rate will increase dramatically immediately at the end of the two or three year fixed period. On some arm loans, the increase to the new adjustable rate may cause your payment to as much as double.

Adjustable rate mortgages are also great for those that have poor credit and are consolidating debt. The adjustable rate will allow you to consolidate your bills and give you the lowest payment that you qualify for while you allow your credit scores to rise. Once they are higher, most borrowers will refinance into an even better rate, or into a fixed rate loan.

Adjustable rate mortgages that have a fixed periods for 3, 5, 7, or 10 years are often called hybrids. They adjust after the fixed period ends.

An adjustable rate mortgage or variable rate mortgage is a loan secured on a property whose interest rate and monthly repayment vary over time.

An adjustable rate mortgage, also known as an arm, is a mortgage with an interest rate that is linked to an economic index. The interest rate, and your payments, are periodically adjusted up or down as the index changes. Ask a mortgage professional if a arm is right for you?

The adjustable rate mortgage tends to rise with the initial rate adjustment period. It is the lowest on arms with initial rate periods of a year or less, and highest on the 10-year version, which comes closest to an fixed rate mortgage.