05Jun
Can I Refinance my Fixed ARM Loan?
![Refinance Arm to Arm](https://home-loan.mortgage/Portals/2/xBlog/uploads/2017/8/3/arm-to-arm.png)
Refinancing now is hedging your bets against higher later this year!
Rates are on the rise. Refinancing from a Fixed ARM to a Fixed ARM can be a successfully strategy in reducing your lifetime interest expenses.
Rates move in cycles that can span months or years. However, there are always dips! I generally recommend that within 2 years of a Fixed ARM term ending, that you start aggressively looking for a dip in the market to refinance. If you are not watching the market daily, then having a partner (loan officer) watching for you is important.
The risk of ARM loans is that they "roll-off" into an adjustable at the end of your fixed term and then adjust annually. Taking a similar or lower rate TODAY vs waiting a couple years is a sound strategy!
There are 2 keys to a successful ARM Refinance strategy:
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- 1) Take advantage of interest rate dips when they occur - Act Quickly!
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- 2) Paying no transaction costs with a COST FREE loan. This removes the costs barrier to frequent transactions.
The ARM strategy is even more important when we are in a Federal Reserve rate hike cycle.
The chart below illustrates the strategy. In the summer of 2016 and Aug 2018, rates were well below the preceding 6 month high and presented a perfect time to jump into another Fixed ARM loan. The result, Fixed Term extended!
![](https://emery.blob.core.windows.net/cdn/images/ARM-chart.PNG)
If the Fixed ARM loan you have now will start adjusting within the next 24 months, then give me a call!
By implementing these strategies, you can benefit with the lower ARM rates while maintaining the security of a fixed rate for decades!
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