Re: Switching from ARM to Fixed Rate
You are going to save 4.1% over the next three years by staying put (plus the costs of the refi). Even if you refi at a fixed 7% in three years it would take you over 10 years to pay that back. And you will likely sell or refi at a lower rate within that 10 year period anyways.
And I'm not even counting the time value of money, which makes your savings from the next three years worth much more than the same amount of interest over the ten years after that.
My guess is that if you can refi at 7.5% or below in three years it makes sense to wait given the time value of money, the likelyhood of selling your home, or just refinancing at an even better rate. And remember if fixed mortgages are 7.5% in three years you can probably do an ARM cheaper.
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