Hi Coopdigity,

Since you already know you are relocating, your only non-fraudulent refinance qualification would be as an investment property. "Intent" is determined (if your loan gets audited for any of many statistical pooling reasons) by what your plans were prior to, and within 6 months, of your application and closing.

This is something that could have been ignored (and extensively was ignored) during the last decade UP UNTIL about a year ago... but today all of the industry *AND* the regulatory world (regulatory auditors of title & escrow companies, licensing auditors of banks & brokerages, attorney generals, etc.) are on 'hyper-alert' for the scheme you might be considering.

Unfortunately, you simply waited too long to act. In order to refinance as an owner-occupied property (and be confident you would survive a likely audit should you change occupancy designations earlier than 6 months post-closing... something immediately identified when you change your insurance coverage to protect you as a landlord) you would have had to;
A) have had no investigable known probability prior to your financial application that you would be relocating,
and,
B) justifiable surprise and urgency after your financing closing at your required involuntary relocation.

THE GOOD NEWS;
My crystal ball (for as far as you want to throw it) foresees the governments of the world keeping short-term interest rates extremely low for a significant intermediate future... at minimum 2-3 years, through Obama's honeymoon period... and potentially as long as 5-15 years, if our economic woes are exacerbated by the flushing of valueless currency into our system "in the attempt to stimulate."

One thing we are ver UNLIKELY to see, IMO, is a repeat of the Volker "overheat the fever" strategy of the late '70's and early '80's, where the Fed drove interest rates as high as into the high teens. Commerce and society overall learned the consequences of that strategy, and we're not about to let our hired help (the politicians) duplicate that lunacy.

SO... if you can do a little meditation to calm the nerves... you're likely best off just leaving that 5 yr ARM in place, and sliding along with its low (and probably downward adjusting) interest rate going forward. Build up sufficient reserves with your interest savings windfalls, and you'll be fine.

Luck!
Dave Donhoff
Leverage Planner