Adjustable rate mortgages are loans with variable interest rates that change according to the market rates, as opposed to fixed rate mortgages, which guarantee a set rate for the entire period of the loan. ARMs may seem like a great idea some years, but in other years, you may wonder what you were thinking when you agreed to the loan.
Many financial experts advise home buyers to seek fixed rate mortgages. The set interest amount makes it easier to calculate monthly payments with no surprises. An adjustable rate mortgage can leave you with unpleasant surprises if the interest rates suddenly soar.
There are some pluses as well as minuses to adjustable rate mortgages. As with any financial decision, learn all you can about the topic and weigh the pros and cons carefully before choosing a loan type.
On the Plus Side...
On the Minus Side ...
Adjustable rate mortgages come in and out of fashion, but the truth is that you shouldn't take out such a loan unless you understand the worst-case scenario and how it may impact your financial health. While they are not for everyone, ARMs do offer some advantages, and those who can take advantage of these opportunities may find them useful. Talk to your lender about all the ramifications of an adjustable rate mortgage compared with a fixed rate mortgage.
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Please contact me if you are looking for homes for sale in Pearland or homes for sale in Friendswood. Call me with any further questions at 281-827-9871 or email me at nancyhappyselling@gmail.com.
Nancy Macias Morales