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If you have been making interest-only payments for a while, you might be nearing the end of the period in which you are allowed to do so. You might not feel financially able to take on a higher monthly payment - is it time to refinance or just sell and find a more manageable property?

Option 1: Refinancing

Refinancing has the benefit of allowing you to stay where you are and avoid the cost of a re-relocation. Especially if you have strong neighborhood ties, need to stay near particular schools, or have family nearby - staying put may be your better option. If you decide to refinance it is important to remember that refinancing begins a new time period for a particular loan. If you refinance on a 30-year loan, the 30 years begins again at the point at which you refinance. The positive side is that your house may have increased enough in value during the period of time you have been paying to allow you a cash-out refinancing after which you could use the cash for other needs.

Refinancing is also a good option if you will be able to refinance into a better mortgage rate than your existing one. If you find this is the case, be careful taking an adjustable rate mortgage that could rise to an unmanageable payment burden down the road. If you have an interest-only loan however, you might not be able to arrange lower payments even if you refinance. If you are refinancing in order to avoid foreclosure, it might pay to look around for the right lender who can provide you the best rate and a little breathing room while you re-evaluate your situation. Loan modification might also be an option to foreclosure. Similar to refinancing, a loan modification involves your original lender granting you a new loan to pay off the first one without re-applying.

Option 2: Sell

Maybe your children have moved out of the house permanently and you are looking to downsize? Have you been offered a better job in another city or state? Has your job changed since you moved into your current house and your commute is barely manageable? Aside from your mortgage payment, there are many reasons a move might benefit you personally and professionally. If this is the case (and the move has the added benefit of lowering your monthly expenses), moving may be a good option for you. However, moving solely to lower your monthly payment may not add up to significant savings after you factor in the costs of moving. Add up the expected cost of your move including real estate commissions, moving expenses, closing costs, and redecorating and make sure this amount still makes the move worth it. Also consider how long you are likely to be in your new house? Do you find yourself moving frequently?

If you are considering selling because of an impending foreclosure, try to find a seller before the foreclosure date so you can pay off your debt and avoid the foreclosure process. Remember that foreclosure is an expensive process for the lender as well. Discuss the possibility of a short sale in which the mortgage holder approves the sale of the property for the total market value.

Buying a home? Refinancing your mortgage? Need some spare cash to renovate your home? There are lots of reasons why you may need to talk to a mortgage broker about a mortgage. The biggest mistake you can make before you do is not doing proper research first.

Research can make you aware of current trends in the market and open your eyes to some of the unscrupulous tactics used by some greedy mortgage brokers. For all the information you need on home refinance visit our site at: http://www.refinancingright.com

Should I refinance my home loan if my ARM loan is about to adjust?

There are many factors that impact whether or not you should refinance an ARM loan prior to a scheduled rate adjustment. For example, if your credit scores have improved since you closed your current mortgage, you may find that you qualify for a loan with much more favorable terms now. It's also important to consider market conditions. If interest rates are trending upward, it can be very wise to change to a fixed rate home loan, particularly if you plan to be in your home for a while.

Individuals with ARM loans are well advised to begin investigating their options for refinancing a few months before their interest rates adjust. It's in your best interest to speak with a trusted mortgage professional about your options so that you can make a wise decision regarding your home loan.

Is it advisable to refinance to a pay option ARM loan?

There are positives and negatives associated with pay option ARM loans. You should educate yourself about the risks and potential rewards before making a decision to refinance to a pay option ARM loan.

Many homeowners choose this option because of the flexibility associated with this type of mortgage. With this type of loan, you have four different payment options each month. This solution can be very beneficial for individuals who need to reduce their credit card debt.

However, there is the risk of dealing with a loan balance that increases over time instead of decreasing, which is referred to as negative amortization. This happens if homeowners who choose a low monthly payment option with an interest rate lower than the actual rate. The loan balance increases because the difference between the payment amount and the actual rate is added to the loan balance.

How can I benefit from refinancing my ARM to a fixed rate home loan?

Both ARM loans and fixed rate mortgages have advantages and disadvantages. When you refinance an ARM to a fixed rate mortgage, you no longer have to worry about interest rate adjustments. When you lock in a rate, you know what your required monthly payment will be for the life of your loan. There is no worry regarding periodic fluctuations in interest rates or mandatory payment amounts.

However, if you don't plan to stay in your home for very long, it might not be in your best interest to refinance your ARM. You may not be there long enough to recoup the closing costs and origination fees associated with a home loan refinance. The length of time you have had your current mortgage can also be a factor. You should always discuss your situation and all options with a qualified mortgage professional before making a decision.

Do I have any options if my current loan is a sub-prime ARM?

If you have a sub-prime loan, you are likely concerned with how your interest rate adjustments are going to impact your ability to pay. If you have a sub-prime loan, the best thing to do for yourself is to establish a sound record of making on-time payments. Once you have made your payments as scheduled for at least a year, you may be able to refinance out of your sub-prime ARM. Talk with a mortgage broker who can work with you to establish a plan of attack for refinancing out of your sub-prime home loan before you find yourself dealing with skyrocketing monthly payments.

This article was brought to you by Refinancing Right. Please visit our site to get more up to date, unbiased, mortgage and refinancing related articles. Our team of content writers cover every topic that can give you an edge and put more money in your pocket.

Don't rely on the mortgage brokers to educate you, as, believe it or not, they are interested in lining their own pockets, before yours. The world of refinancing and mortgages is complicated and everyone can benefit from educating themselves a little more. It is our goal to help you do just that.