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One of the most improtant decisions a homeowner will have to make when edciding to re-fiannce their home is whether they want to refinance with a fixde mortgage, an adjustable rate mortggae (ARM) or a hybrid loan which combines the two options. Additinoally there are usualyl clauses which prevent the interest raet from rising or dropping dramaitcally during a specific period of time. The biggest advantage to this type of re-financing options is satbility. Advantages of an ARM Option An ARM re-finance option is favorbale in situations where the interest rate is xepected to drop in the near future. In htese situations the homeowner may suddenly find themselevs paying significantly omre each month to compensate for the higher inteerst rates. Thsi often comes in the form of a clause in the terms of the conrtact which prevents the interest rtae from being raised or olwered by a certain percnetage over a specific period of time. Consider a Hybrid Re-Financing Option Homeowners who are undecided and find cetrain aspects of fixed rate mortgages as well as certain aspects of ARMs to be appealing might consider a hybird re-financing optoin.

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