When to Refinance to a Fixed Rate Florida Home Loan

Those possessing an adjustable rate Florida home loan may have to brace themselves for this staggering figure:

- More than $2 trillion of adjustable-rate mortgages come up for interest-rate resets in 2006 and 2007, according to Moody’s Economy.com. For millions and millions of home owners across the nation, therefore, the danger years on their Florida home loan are about to commence.

Moreover, the timing couldn’t be worse if you’re looking to refinance to a fixed rate home loan - mortgage rates on 30-year fixed rate Florida home loans are at the highest level since 2003.

WHAT TO DO: If the rate on your ARM is about to move higher and you have no plans to move in the next five to seven years, locking in a fixed-rate mortgage may make sense. To find out how much more you’d pay refinancing to a fixed-rate loan, click here.

If you DO plan to move soon, don’t bother refinancing - it’s likely you wouldn’t recoup your closing costs. For borrowers with hybrid mortgages, which combine a fixed-rate and an adjustable-rate loan, the decision to refinance or wait until the fixed-rate period ends depends on whether it’s likely rates will continue to rise, or whether we’re nearing the end of the current round of rate increases, as some economists predict.

Study the economy closely. Try to gauge the period when refinancing your Florida home loan will save the most money.