If you’re thinking of refinancing your current adjustable rate mortgage into a fixed rate mortgage, there are a few things that you might want to look out for in 7 year ARM rates. ARM mortgages were originally designed as a short-term solution to financial difficulty, and they were quite effective at doing so, for the time. In particular, homebuyers were able to take advantage of extremely low interest rates that made their monthly payments well below the level that many people could afford. This gave them time to pay down other debts or invest money in assets that would generate a higher return. Unfortunately, things are not quite so favorable today. Interest rates have continued to drop since the global financial crisis began, and homebuyers are having a much tougher time qualifying for a loan. Some lenders are cutting back on their loan requirements, while others are raising their requirements. Meanwhile, other financial institutions are adopting a “tight” stance when it comes to approving mortgage loans. All these factors have caused an increased number of defaults on adjustable rate mortgages over the past year. So what does this all mean for borrowers? In short, it means that now is a very bad time to refinance your adjustable rate mortgage. Sure, it’s possible to get a good rate if you know where to look. But many buyers are simply unwilling to take the risk of getting a fixed rate mortgage. There are a number of reasons why this might be the case. Let’s take a look at a few: The economy is still slow. Homebuyers need to realize that they’re probably going to experience some slower growth in their income, and their credit rating, than the national average. That’s going to reduce the amount of money that they can borrow from lenders. That can mean higher fixed rates, or lower adjustable-rate mortgages. Adjustable rate mortgages include things like interest rates caps and floor amounts. Both of these can cause your monthly payment to go up if you want to lock in a low rate. Interest rates are starting to rise. While historically that has always happened, this is the lowest they’ve been in over two years. While the inflation is causing mortgage rates to go up overall, mortgage rates for adjustable rate mortgages are going up more. It’s important for you to remember that when you refinance your mortgage, your rates are not going to go down. Mortgages are risky. This is one reason that people prefer adjustable rate mortgages. They offer more safety than a fixed rate mortgage. But if your financial problems aren’t quite that bad, then you should try to keep your current mortgage. If you’ve been trying to get a better rate, then refinancing may be your best option. There’s another reason. Over time, the fixed rate mortgage is becoming more like a luxury. People who are good at their jobs and make a good income are getting locked into them because they’re so secure. If you’ve been struggling to get lower rates, and are in need of lower monthly payments, then it’s time to consider refinancing. You can lock in a low rate today and save money in the long run. Your mortgage company may not tell you what the prime rate is. However, you can use a mortgage rate calculator to figure it out for you. Using these calculators online will allow you to compare what your mortgage rates might be to those of others. With a bit of shopping around, you can easily change your mortgage payments to something you can afford.