ARM Mortgages with Ryan Herbig

ARM Mortgages with Ryan Herbig


Interest rates have taken a strong hike over the last year. Has this make a difference in buying power? How has it affected refinancing?


Today, Deborah Elliott-Shultz is joined by Ryan Herbig of American Liberty Mortgage to discuss what’s happening with mortgage loan interest rates and why some people choose to refinance.


Spring was really hot this year because we had very little inventory in the housing market. Now school has started and it’s a whole different market. The reason people look in spring and summer is so they can move before a new school year starts. This particular decision helps with the moving pressures on their kids so they don’t have to be the new kid in the middle of the school year.


But try not to fret about the different market.


It is true that prices are decreasing right now while interest rates are on the rise. Which means many people are wondering does it make sense to buy a home right now?


If you are not familiar with adjustable rate mortgages (ARM), it is tied to the London InterBank Offer Rate (LIBOR). It’s a figure used to determine ARM rates. As economy goes up, so does the adjustable rate mortgage. For those who have an adjustable rate mortgage (ARM), you might be wondering if there is anything they can do. Refinancing might be the way to go.


Why are interest rates going up? The Fed is raising interest rates because we’re getting strong jobs reports, incomes are going up, and inflation is going up. These are the factors that play a part in all interest rates.


If selling your home is not an option right now, you still have a few options with your mortgage. Home values have gone up meaning you have a higher equity in home. You can redo an ARM to get a fixed rate or even get a home equity home line of credit.


Your choice between a home equity line of credit and refinancing for a fixed rate mortgage is dictated by how much money you want to pull out of your home equity. If the amount you need is between $10,000-$20,000 a home equity line of credit would be a better option. If you’re going to need $50,000 or more, getting a fixed-rate loan would probably be better. Sitting down with a lender would be beneficial to figure out which option works best for your situation.


Something to consider is that an increased interest rate affects buying power. Generally for every 1% rate change, there is roughly a $50,000 change in buying power depending on loan type. And credit scores, income, etc. also still play a big part.


When you’re considering a refinance of your current mortgage, you’ll want to sit down with a local lender and discuss whether it is a good option for you. You’ll be discussing length of time to stay in the house, what you want to do, how much you want to pull out, and if you have private mortgage insurance (PMI), you’ll want to look to see if you have enough equity in your home to still need PMI.


PMI is insurance for the lender in case the borrower defaults on the loan. It is there to benefit the lender, so if you don’t need it, removing it would be of benefit to you.


In the past, we had a lowering rate environment that we don’t have now. Refinancing to save money on a monthly basis isn’t really going to work right now. But if you want cash or want to get rid of mortgage insurance, it might be the right move. However, sitting down with a lender like Ryan Herbig will help you determine if it will work or if won’t. One reason Deborah works with Ryan is that he will tell you when something won’t be beneficial to you.


Don’t shy away from refinancing. There are some people out there who really need to do it. But you need somebody local because there are people out there who might think that they need to refinance, but don’t really and it’s important to have a lender who will let you know.


If your lender is not local, it’s not guaranteed that the funds will be there.


If you would like to would like to sit down with a local lender to discuss refinancing a home, determining what options are available for ARMs, learn more about the down payment assistance programs, or you would like to sit down with someone to discuss what is involved in getting a home loan, call Ryan Herbig of American Liberty Mortgage at (719) 228-6055 or on his mobile at (719) 659-0043. Interest rates are only projected to increase. So, now is the time to look into this.


Are you interested in finding out about Deborah Elliott-Shultz and MiaBella Properties’ flat listing fee of $3500? Go to and follow the real estate links to learn about all we do to sell your home. And, have you heard about our buyer’s rebate? That’s right! We give back 1/3 of our commission to help you with your closing costs or to buy new appliances which will be reflected on the settlement statement, and you’ll get it at closing along with a W-9.


If you have any real estate questions, or to find out how MiaBella Properties can help make your real estate experience more affordable, call Deborah Elliott-Shultz at (719) 641-1357.