One of the first questions to ask when refinancing, is do I want an adjustable rate or fixed rate mortgage?

The best way to arrive at an answer is to determine whether your home is going to be a short term or long term investment.

Short Term Investment - If you plan to own your home for only a few years, generally no more than five years, then an adjustable rate mortgage and/or interest only mortgage may be a choice for you.

Long Term Investment - If you plan to own your home for more than five years, then a fixed rate mortgage may be the better choice for you. This is also the most appropriate choice if you are on a fixed or limited income, or if you like the stability of paying the same amount per month for the next 10, 15 or even 30 years.


Adjustable Rate Mortgages (ARM) - may be the best choice if you only plan to own your home a few years.

• Borrowers can qualify for a larger loan up front
  
  
• Interest only payment options are also available
  
  
• Rate caps provide protection against unlimited interest rate increases
  
  
• Common programs include 1/1, 3/1, 5/1, 7/1, and 10/1 terms*
  

*A 3/1 ARM has a fixed interest rate for 3 years and then adjusts every year after.


Fixed Rate Mortgages - as interest rates are near historic lows, and will trend up in the near future this would be a good way to go in the current market and certainly if you're planning to stay in your home for a long period of time.

• Predictable fixed monthly payments
  
  
• Interest rate increases are avoided
  
  
• You can own your home sooner
  
  
• Most appropriate choice if you are on a fixed or limited income
  
  
• Common programs include 15, 20, 30, & 40 year terms
  

For more details please view Frequently asked questions

When you're refinancing the smart mortgage choice is The Honest Mortgage Company! Call us today at (858) 748-8700 for professionalism you can count on!

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