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Should I refinance now & if yes which is best, Fixed Rate 30 yr or 7/1 adj rate mortage?

Currently I have a 5/1 adjustable Mortage, $112,220.18 started 2.14.2006. my current intrest rate is 2. 7/8 on my 1st mtg and I have a baloon pmt due 2.14.2016 of $14,698.48 currently @ 7.6% since the inception of the loans. approx value of my home is $148,000. I'm hoping for suggestion / direction on what to do wait for baloon pmt to come due and re-fi then or try to combine both now and pick a new mortage type and terms? please advise-Todd
By swankster24700 from NC Nov 24th 2014

Hi Todd,If you're planning on staying in your home for a relatively long time I would refi into a fixed rate in the near future. Rates are still at almost historic lows and have been between 3.75 and 4.25 for over a year.I would get rid of the balloon at the same time.

Nov 24th 2014

Hi Todd,It is never wise to have a balloon payment coming due. I would start the refinance process as soon as possible so that you are not trying to close your refi at the last minute. It is best to chose a 30 year fixed loan so that never have to deal with refinancing again. Chosing another adjustable mortgage will be at a risk since we do not know just how high the rates will be 5/7/10 years from now. If you are located in California and have any questions, give us a call at 951-452-9113.

Dec 3rd 2014

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