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What Type Of Home Mortgage Should I Get?
A home mortgage is a loan which is either fixed or adjusted over a period of 15 to 30 years. Where can I secure a home loan? Commercial banks, credit unions, and various independent lenders. What is a fixed rate home mortgage? This type of mortgage has a set interest rate over a specified period of time. The interest rate does not change throughout the term of the loan. What is an adjustable rate mortgage? The adjustable rate mortgage usually has a fixed interest rate over a set number of years from the initial start of the loan period. The rate can fluctuate either up or down. The change in the interest rate can be adjusted monthly, quaterly, semiannually, or annually. Why should I consider an adjustable rate mortgage instead of a fixed rate mortgage?
If you are looking for a lower interest rate mortgage and you don't plan to stay in your home longer than 5-7 years, then an adjustable rate mortgage(ARM) may be for you.
The adjustable rate mortgage will have lower monthly payments allowing you to qualify for a mortgage if your are having difficulty getting approval. The downside to having an ARM is that your interest rate can increase over time. Why should I consider a fixed rate loan? Your monthly payment will be at a fixed amount, and will not change over time.
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