Posted on: 03rd Jan, 2013 10:35 pm
Hi there… I need help on behalf of my parents. I want to help them in refinancing. Around 2005, my parents took out an ARM which is now underwater. The rate of interest gets adjusted every year during April-May. They have received an offer from their lender to go for fixed rated 30 year mortgage. Should they go for this option?
In case of fixed rate mortgage, the rate on the mortgage taken out by your parents will remain same. So, they will have to make fixed payments over 30 years. Again, the mortgage rate is now very low. So, they may lose the chance of making comparatively low payments at least in the current situations. But, anyways rate may go up in the near future. Keeping all these things in mind, refinancing to an FRM may not be a bad idea.
Hi kolly,
If the property is underwater, then qualifying for a mortgage will be difficult. It is quite surprising that they have offered your parents a fixed rate mortgage.
If the property is underwater, then qualifying for a mortgage will be difficult. It is quite surprising that they have offered your parents a fixed rate mortgage.