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This is part of an ongoing blog series that discusses commonly used mortgage strategies among home buyers and homeowners in Washington. Today, we’ll talk about how a homeowner in Washington State could benefit by refinancing from an adjustable-rate mortgage (ARM) into a fixed-rate home loan.
Do you currently hold an adjustable-rate mortgage? If so, refinancing into a fixed-rate mortgage might help you save some money if you play your cards right and if the current market makes this a viable option.
Before we get into the reasons why a homeowner might refinance from an ARM into a fixed-rate loan, let’s do a quick review of the terminology:
So right away, you can see why a homeowner in Washington state might refinance an ARM into a fixed-rate loan. Adjustable mortgages tend to start off with lower rates when compared to a long-term fixed rate loan. But that’s only during the initial stage. ARMs live up to their name by adjusting annually once that initial stage has passed. And this is when a lot of homeowners start to consider a refinance.
The ideal scenario, for most homeowners in the situation, is to refinance from an ARM loan into a long-term fixed mortgage while rates are relatively low. This strategy makes sense if you plan to stay in the home for the foreseeable future.
While no one can predict future mortgage rate trends with complete accuracy, the general consensus among analysts is that interest rates will likely decrease in 2024 and 2025.
Rates have been on a steady increase since January 2021, but they have plateaued and started to come down since October 2023. The average rate for a 30-year fixed-rate mortgage currently sits at 6.61% and is expected to dip down to around 6% by the end of 2024, according to the weekly survey conducted by Freddie Mac.
Other mortgage strategies in this series:
Do you have questions about home loans? Are you ready to apply for a mortgage to buy a home? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington serving the entire state, as well as Oregon, Idaho, and Colorado since 1992. We offer many mortgage programs to buyers all over the Pacific Northwest. Contact us today with any questions you have about mortgages.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.