About once a month, I get an email or comment from a reader criticizing adjustable-rate mortgages (ARMs) as a poor financial choice. Since I’ve been a proponent of ARMs since starting Financial Samurai in 2009, I understand the pushback. Roughly 95% of homebuyers with mortgages get 30-year fixed-rate mortgages. However, I still prefer an ARM […]
How An ARM Can Save And Make You More Money On A Home Read More »
With record-high home equity and declining mortgage rates again, the temptation to do a cash-out refinance is growing. I’ve certainly considered it myself. Real estate prices have surged during the pandemic and most homeowners refinanced to mortgage rates below 4%. However, after careful reflection, my conclusion is that it’s probably not the best move. Having
Resist The Temptation To Do A Cash-Out Refinance As Rates Collapse Read More »
If you bought a home during a high-interest rate environment, it’s wise to prepare for either a mortgage refinance or a recast. Interest rates have been gradually coming down since their highs of 2022, but also started going up after Trump became president. Over the next four years, I suspect millions of existing homeowners will
Letting An ARM Reset Is Similar To A Free Mortgage Recast Read More »
During my days of purchasing homes with mortgages, I had a fondness for adjustable-rate mortgages (ARMs). The appeal lay in securing a lower interest rate compared to a 30-year fixed-rate mortgage. Further, it’s better to align the fixed-rate duration with my planned homeownership tenure. With the average duration of homeownership being approximately 12 years, opting
No Rush To Pay Off Your Adjustable-Rate Mortgage Before It Resets Read More »
Contrary to popular belief, the Federal Reserve does not exert complete control over mortgage rates. Instead, it influences them, with the bond market determining the subsequent course of action. The Federal Reserve oversees the Fed Funds rate, which represents the overnight lending rate for banks and stands at the shortest end of the yield curve.
Components That Affect Mortgage Rates The Most Read More »
I realized something important for all of you who have automatic mortgage payments and also like to automatically pay down extra principal each month. It is don’t forget to adjust your mortgage autopay amount down when rates increase. When I refinanced a primary residence loan in 2019, I decided to get a 7/1 ARM at
Adjust Your Extra Principal Automatic Mortgage Payment When Rates Rise Read More »
On August 1, 2020, I took out a 7/1 adjustable rate mortgage (ARM) at 2.125%. I could have gotten a 30-year fixed-rate mortgage for 2.75%. However, I wanted to save 0.625% in interest. Years later, mortgage rates zoomed higher thanks to the pandemic, massive stimulus spending, a war in Ukraine, a war in Israel, trade
No Regrets Getting An ARM Despite Higher Mortgage Rates Read More »
Thanks to reader feedback, I realized one financial move that was not included in my top financial moves to relieve stress list, was paying off your home. Even though I thought long and hard about what to put on the list, paying off your home didn’t get a dedicated bullet point, just an add-on. Paying
Paying Off Your Home May Not Provide The Joy You Expect Read More »
The higher your credit score, usually the lower your mortgage rate. Every time I went to apply for a new mortgage or refinance an existing mortgage, my mortgage lender would first ask for my credit score. If I said anything lower than a 720, they would politely tell me to look elsewhere. Before the 2008
Higher Credit Score Now Means Higher Mortgage Fees Or Rates Read More »
Why The Federal Reserve Does Not Control Mortgage Rates
The Federal Reserve Doesn’t Control Mortgage Rates, The Market Does Read More »
