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Planning to move in the next few years? Here's a simple way to save some money.  Convert your 30-year fixed rate mortgage to a 5-year ARM.

It's playing the mortgage system to your advantage.

I've been a loan officer for long enough to know that homeowners around the country -- in places like Cincinnati, Chicago, Denver, or wherever -- will willingly pay a higher interest rate for a 30-year fixed rate mortgages than for comparable 5-year ARM.  This is because 30-year fixed rate mortgages guarantee unchanging mortgage payments for as long as the loan is alive.

To a lot of folks, the predictability of a fixed-rate mortgage is worth its premium price -- even at a cost of tens of thousands of dollars over the life of a loan.

But plans change.

Families grow, families shrink, and people relocate.  And when you no longer need the security of a 30-year fixed rate mortgage, the "premium price" you so willingly paid begins to look like a giant waste of money.

Consider an ARM instead.

Adjustable-rate mortgages frighten some people, but they're perfect for a relocating household.  Because the "beginning interest rate" of a traditional ARM doesn't change for a fixed period of time -- say, 5 years -- the risk of "outliving" the initial interest rate is very, very small. All the while, you're saving money on your mortgage payment.

Replacing a 30-year fixed rate mortgage from 2005 with a 5-year ARM at today's rates would save 20% per month.

But before you rush to refinance, there's a few caveats.  You have to do your refi right:

1. Your ARM should be a true, zero-cost loan. Ask your lender to pay all of your fees.
2. Your loan balance to stay exactly as-is -- don't "pad" it with cash-out

By taking both of these precautions, you will maximize your monthly mortgage savings.

Furthermore, you'll want to make sure your home doesn't sell within 5 months of the refinance to an ARM or else your lender may "recapture" its waived fees from you.

For soon-to-move households, there's no reason to keep a high-cost mortgage when a perfectly suitable low-cost mortgage is waiting.  And, right now, with ARMs priced really well, it's a perfect time to explore what's available.  Your life changes, after all -- your mortgage needs change with it.

To see what a switch to an adjustable-rate mortgage could do for your monthly mortgage, call or .  If you have a copy of your mortgage statement handy, you can send it along, too.  We'll want that information to get you as precise figures as possible.

Dan Green is an active loan officer. Email or call 513-443-2020. Dan is on Twitter at @mortgagereports.