Refinancing from ARM to 30 year fixed?

I am looking to refi from a two year ARM to a 30 year fixed( to a lower interest rate)...what are the questions I should be asking the mortgage companies?

4 Answers

Relevance
  • 1 decade ago
    Best Answer

    Ask about the total closing costs you will pay. Ask them who will service the mortgage and will it be sold off? You will want to know if your pmts will be sent off to who knows where!

    Ask the interest rate and the down pmt you will be offered.

    Ask to see and example of a hud 1 settlement statement they did on a recent close so u can see potential costs.

    Only get a fixed rate, No arms, Arms are exploding mortgages stay away from those product that brokers and bankers offer!!!

    Remember think fixed rate only!!! and you will be fine.

    PS watch out for outragous junk fees on closing statement brokers and banks are notorious for these.

    loan processing fee

    under writting fee

    administration fee

    all garbage fees

    If they try to sell you a crap loan that u don't understand say no!

  • Anonymous
    4 years ago

    If it cost $4400 to do the refi ad you net a savings of $52 a month; it will take 7 years just to recover your cost of the transaction and almost 8 years to get a 10% Rate of Return on the investment. Not what I would call great Numbers but you also are reducing your risk of the ARM adjusting so IF you are planning on keep this as a rental if MAY make sense, but there are a few OTHER factors you need to consider. If you live in the home for 2 out of the last 5 years, you can sell ad take up to $250,000 TAX FREE gain if single, $500,000 if married. You lose part of this under Obama's current plan if you rent it out. Second is what are rental rates for the house and what is the cash flow? What is the population and job growth in your neighborhood? IF this house is in Detroit where jobs AND population are dropping that is a COMPLETELY different picture then if the house is in a city GROWING jobs and people. Third factor is tax's of the property, the state, and how you how your income/property structured. Is this titled in your personal name? Great for taking the tax free gain but VERY risky if turned into a rental. Based on information provided I can't tell you what fits best for you.

  • 1 decade ago

    Where do I sign? ARM's are typically not good investment choices unless you can refi before the hike kicks in. Mortgage rates are going down now so should be good. But ask how much closing costs are and what is needed at the time you refi.

  • Cupid
    Lv 6
    1 decade ago

    This is the best decision you could possibly make. ARM loans are horrible and I think they should be outlawed. Right now, when interest rates are extremely low, is the best time to take advantage of refinancing into a 30-year fixed if you can. Contact your lender and discuss it with him/her, they can be the ones to shop around for a good mortgage loan for you. Best Wishes.

Still have questions? Get your answers by asking now.