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I am not sure if I should refinance or not. If I do not, what happens with my current ARM loan when it resets?



Here is my situation:



1st mortgage 5yr arm at 5.125% balance $214K

2nd mortgage 30-yr fixed at 7% balance $21K



My 5-yr ARM is going to adjust in June 2010.



My approx. LTV (including both loans) is 93%. I got 820 credit score, good salary, no debt or major expenses besides mortgage payments.



Anyone know of lenders (forget the online mortgage quote tools). I believe in the word of mouth advertising... Has anyone gotten a good refinance deal recently - with what lender?



Thank you.

P.S. Correction balance on the 1st mortgage is $184K.

Checked my contract. My rate is tied to the 1-yer Libor, the margin is 2.25, loan will adjust once per year. Sounds like I could take some risk and stick with this loan for another year or two? Comments are welcome..

Your mortgage contract will spell out exactly what index is used and how many points over that index you will be paying. With today's low interest you may actually adjust downward. So calculate what the interest rate will be based on today's rates and you can go from there. Since your loan to value is 93% you may have a hard time refinancing without putting up some cash. Also in order to refinance you may have to pay off the second.