So the Fed raised interest rates this week for the first time in years. This is based on an improved economy. It is being forecasted that rates will continue to raised in the next year to keep inflation in check. If you have a variable rate mortgage, your payments will go up every time that Fed changes rates and this could cause a significant increase in your monthlypayment.

Keep in mind that the interest changes at a predetermined time and may change every year.

Reasons to consider refinancing your existing mortgage
◾If interest rates are going up, your ARM’s interest rate and monthly payment will go up. Your lender will notify you about any changes in rate or payment.
◾If the difference in your ARM’s adjusted interest rate and the rate on available fixed-rate loans is small, you can lock in a low rate before things go up.
◾If you’re not planning to sell your home in the near future, it may be costly for you to accept your ARM’s payment adjustment.

Compare fixed- and adjustable-rate mortgage estimates with our rate and payment calculator.

ARM refinancing options
◾You may want to consider refinancing to a new ARM if you can match the amount of time you think you’ll own your home with the new ARM’s initial fixed-rate period. Find out about  adjustable-rate loan options.
◾If you expect to remain in your existing home for a longer period of time, a fixed-rate mortgage protects you from rising interest rates and has fixed monthly principal and interest payments for the entire mortgage term.

Fixed-rate mortgage features
◾A shorter loan term provides faster equity growth and requires less total interest payments.
◾A longer loan term has lower monthly payments and may provide greater potential tax deductions. (Consult your tax advisor).

Ruth Schoenherr is a mortgage broker who will help you find home loans in the Clearwater, Palm Harbor, Largo, Safety Harbor, St Petersburg and Tampa Bay area. For more information, go to her web site at www.ClearwaterMortgageBroker.net.