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Adjustable or Fixed Rate?
Adjustable or Fixed Rate Mortgages?
Adjustable or Fixed-Rate Mortgages? - Determining whether to choose an adjustable rate mortgage or a fixed-rate mortgage can be confusing. This video can help make that decision easier.
Deciding between a fixed rate and adjustable rate mortgage comes down to several factors. In general, a fixed rate mortgage is good for a homebuyer who wants to know exactly what they will be paying for the life of the loan. This type of homebuyer should plan on spending a lot of time living in the home as interest rates tend to be slightly higher on a Fixed Rate Mortgage(FRM).
Homebuyers who are better suited to an Adjustable Rate Mortgage(ARM) are those who intend to move within five years, are buying a home for the first time or plan on getting married soon. This type of homebuyer should have a save now, pay later mentality due to the fact that Adjustable Rate Mortgages tend to start out at a low rate and adjust with the market.