For the last couple of months, I've been contacting clients and giving them that opportunity. You're getting much more bang for your buck doing a fixed-rate mortgage than doing an adjustable-rate mortgage. |
They figured they would be moving, downsizing or able to pay it off. |
They should calculate what their rate would be if adjusted in today's market and compare that with today's fixed-rate market and assess their personal situation. Do they have adequate funds to reduce or pay off their mortgage at the end of the adjustment period? |
They typically had a game plan in mind. A lot of them are still hesitating. Until they really see it starting to move up significantly, it's very difficult for them psychologically to move away from that. |
You need to factor in the (interest-rate) differential, as well as the costs of refinancing. |