Like many in Southern California, my mother-in-law refinanced a few years ago. Thinking she would soon sell her house, she opted for an ARM, but recently that ARM moved from fixed to adjustable, and every month her monthly bill has increased.

Fortunately, my mother-in-law has a large amount of equity in her home, and she has decided to fix her rate, and today’s rates are still great.

Many are not as fortunate as my mother-in-law.

As real estate prices in Southern California have escalated over the last several years, it has become harder for most SoCal residents to buy-into the real estate market.

The only way that many could finance a home purchase was through an ARM or an interest-only loan, rationalizing that a profitable sale would be just around the corner.

This question; however, must be asked, “Where are you going to move?”

Unless you are moving out of Southern California, will this logic work? If you sell when it’s a seller’s market, then you have to buy in a seller’s market, and that logic doesn’t make sense.

As with any investment, the goal is to always sell high, buy low, but these people seem to falsely assume they can have it both ways.

Now that the economy is continuing to slug along, the Southern California real estate market has tempered.

Now is the time to fix your rate. Perhaps interest rates will remain forever low, but conventional wisdom, on the other hand, leans towards interest rates rising.

Even if interest rates don’t rise, the market has already cooled in Southern California as the market readjusts. Where it goes from here is anybody’s guess.

If you are one of those recent Southern California homebuyers, afraid to miss out on your dream of homeownership, that extended themselves to purchase a house, think about your options.

With rates almost certain to rise, and the real estate market stabilizing – minimally – now seems to be the time to lock in historically low rates.

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