Recently, the Chairman of the Federal Reserve increased the federal discount rate consistently. This rate - the rate at which banks and many other lenders may borrow from the U.S. government - establishes one of the primary leading indicators of the direction of change in mortgage rates. As all rates climb higher, all homeowners eventually ask, why refinance back into a 30-year loan?

For many homeowners, mortgage refinancing is an excellent means of consolidating consumer debt, or gaining cash out access to existing equity for unexpected personal expenses. Even though a fixed rate 30 year mortgage may be slightly higher than an ARM, or your current fixed rate mortgage, the savings achieved by consolidating debt easily offset a slightly higher mortgage rate many times over. If consolidating or drawing cash out, converting to a lower fixed rate also further reduces your cost in the market today as ARMs climb higher. The best companies also offer fixed rate refinance costs as low as $400.

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