Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to home ownership. It is a financial implement that must be managed, just like any other financial investment. “Think of it as part of your financial tool kit,” suggests Susan Martin, a vice president and spokesperson for Countrywide Home Loans, one of the country’s largest lenders. “And it’s a dynamic financial tool, not a static one.” Years ago, people took out 30-year loans, threw their mortgage papers in the drawer and didn’t take them out again until 360 payments later. Then they held mortgage-burning parties.

If rates have risen, and it looks as if yours is going to reset higher, it also might be time to refinance into a loan that’s more stable, or maybe another ARM with a lower start rate. Another advantage of today’s multiple-choice mortgage market is that you can match your loan to significant life events, not just changes in interest rates. If your spouse decides to give up his or her job to stay home with the baby, maybe you can trade in your current mortgage for one with payments that more closely match your reduced income. If you just took a new job that pays significantly more, perhaps a new, shorter-term loan with larger payments is now in order. Maybe a loved one has had a major illness; it’s time for Junior to go to college; or an investment opportunity presents itself. All of these are personal events that have a significant effect on your bottom line, and a new mortgage might be something to consider.

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