Many people in Hawaii are experiencing a tropical storm with their adjustable rate mortgages, as the number of foreclosures recently listed may prove. An adjustable rate mortgage looked good to many home buyers when they got the home loan, because they offered the lowest introductory Hawaii mortgage rates. These were only teaser rates, though, and as the adjustment period begins, many homeowners find the mortgage rates are too high to make the monthly payments.

Anyone with an adjustable rate mortgage that is about to go up has a safe place to hide from the mortgage interest rate storm that is brewing. Home mortgage refinancing to secure a lower fixed rate mortgage can help many Hawaiians stay in their tropical dream homes. A home mortgage refinance can help home owners get the best Hawaii mortgage rates locked in, with predictable payments for years to come. 

Adjustable rate mortgages have been wildly popular in Hawaii in the last few years. More than 30 percent of all mortgage loans taken out in 2005 were adjustable rate mortgages. In 2007, though, the low introductory interest rate on many of those mortgage loans has evaporated like the summer rain. The Federal Reserve has continued to raise the interest rate, which hits adjustable rate mortgage holders particularly hard. Many Hawaiians have seen their mortgage payments rise as rapidly as the lava spewing from a volcano.

“A lot of the adjustable rate mortgages are starting to adjust,” said Jared Bernstein, senior economist at the Economic Policy Institute in Washington, D.C. “When those terms end and they need to be reset, mortgage rates are going to be a percent or two higher. You’re talking about a few hundred dollars per month and as much as $1,000 or $2,000 more per year. That is going to pinch.”

The mortgage pinch can be avoided with a Hawaii home mortgage refinance. By refinancing from an adjustable rate mortgage to a fixed rate mortgage loan, the Hawaii mortgage rates will remain stable on the loan. This means that the monthly mortgage payments will also never change for the life of the home loan. By securing a home mortgage refinance now, while Hawaii rates are still attractive, home owners can save tens of thousands of dollars during the life of their home loan.

Anyone can calculate the savings of a Hawaii home mortgage refinance loan from the comfort of their home or office. Simply calculate the monthly savings and divide the closing costs of the home mortgage refinance loan by that amount. If a home owner can save $150 per month by switching to a fixed rate mortgage, and their total refinance fees are $1,500, the home mortgage refinance will pay for itself in 10 short months. Then the savings begin.

Just like the weather, there’s no way to predict Hawaii mortgage rates. Adjustable rate mortgages may still be heading into a tropical storm of their own. By refinancing mortgage rates now, Hawaiians can find a place in the home loan sun.