Are You Moving In The Next Few Years? Save Big Money On Your Mortgage.

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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.