Get Out The ARM Loan Contract ASAP!

[Expert-Author]

No one really knows what the economic standing will be in 5 months.
Like the stock market there are too many complex unforeseen factors to
consider.

That said get out of the ARM as soon as possible. ARMs are volatile
and can alter your financial situation drastically. Get into a fixed
rate ASAP.

Pay down your credit cards as soon as you can. But put emphasis on
getting out of the ARM for now. You may be able to free up money
getting a better rate and commence paying off your credit cards then.
If you're credit score is at modest or high levels you are in a good
position to focus on improving your mortgage situation.

The Fed is expected to cut rates 50 bps following a historic rate cut
just last week. The Fed's key rate is the federal fund rate, which is
the interest that banks pay each other on overnight loans. It now is
at 3.5 percent, but is expected to drop to 3 percent at the Fed
meeting Jan, 30th 2008.

Banks would be expected to lower their prime lending rate by a
corresponding amount -- from 6.5 percent to 6 percent. The prime rate
applies to certain credit cards, home equity lines of credit and other
loans. Should all this happen, then both the funds rate and the prime
rate would be at nearly three-year lows.

Home equity loans and lines of credit are already reaching
attractively low levels and consumers are expected to take advantage
of a borrowers market. If you wait to refinance you may run into slow
loan processing as many did during the refinance wave in the early
part of the millennium.

Is now a good time for you to refinance? Much depends on how low your
rate offers are in comparison to your current mortgage rate. If the
rates are just .25% lower you could save hundreds even thousands of
dollars when refinancing your home.

Should You Refinance My Home Equity Loan?

Home equity loan product rates are expected to drop to levels lower
than they have been for years. Compare home equity loan rates offered
by lenders to those you currently have. You may be able to save
hundreds if not thousands over the life of the loan refinancing at
today's lower rates.