Interest rates are on the rise, and that means the 25 percent of homeowners who hold adjustable-rate mortgages are beginning to feel the pinch. Gerri Willis at CNNMoney has some advice to help these folks guard against higher rates. She recommends that homeowners:
- Know the stakes. The increased rates can make hundreds of dollars of difference in your monthly payment, all of which goes to interest.
- Buy some time. Though it will cost now, you will likely save in the long-run by refinancing with your current lender. Call to see which options are available to you.
- Re-evaluate your home equity line of credit. Pay off your HELOC if possible (but beware prepayment penalties). Otherwise, consider refinancing it into a new loan with your mortgage.
- Don’t consolidate. Though it’s tempting, it’s probably cheaper not to consolidate your other debts into your mortgage. A mortgage stretches out your payments so that you may actually pay more in the long run.
- Forget the fees. Get rid of private mortgage insurance, if you can. Check to be certain you’re not paying other unnecessary fees.
Read the entire article at CNNMoney.