Friday, 15 March 2013

What is Fixed And Adjustable Rate Mortgage

Have you thought about current fixed mortgage rates? There are advantages and disadvantages to this type of mortgage with the biggest problem being the potential for payment fluctuation. While this may be fine for those who can almost guarantee their salaries will increase each year, the current economy makes even this questionable since many companies have put freezes even on cost of living increases. Those who are retired and living on a fixed income also may not be good candidates for an ARM.

Several decades ago when Fixed Rate Mortgage Rates were much higher an adjustable rate home loan was a highly acceptable way to go. With fixed rates at extremely low rates in the 21st century, most people are choosing the convenience of knowing how much their payment will be for the long-term without worrying about fluctuation unless it involves the taxes and insurance. However, those who do not plan to remain in their homes for very long may find an ARM rate more advantageous. After all, you start out with a much lower rate, there is a cap on how much it can go up each year, and the term of adjustment may be as high as ten years depending on the terms of the loan. If you plan to remain in your home for a long time, a fixed rate loan is probably better suited to your needs.

Fixed rate mortgages have increased in popularity since the interest rates have come down. This doesn't mean you should not look for the cheapest fixed rate mortgage because there are still some lenders with lower rates than others. Even bad credit home refinancing is subject to variations among the lenders. On the other hand adjustable rate home mortgages are still popular with some people, especially those who don’t plan to remain in their homes for a long period of time.

If you’re looking to refinance your current mortgage or purchase a new home, is the right place to begin looking for information. This highly informative and efficient website contains more information than the average visitor is seeking, and it is all free for the taking. In addition to all this great information, there is a database of over 260,000 legal and financial experts all over America ready and willing to provide those services. If you would like to schedule a free consultation, all you have to do is call 800-397-1897.