Fixed vs. Adjustable Mortgages

There are many options to consider when deciding which mortgage is more in tune with your financial needs. Will you need a fixed rate or adjustable rate? Consider the information here and then consult one of our trained mortgage professionals to help you with the details.

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Many home buyers find the low initial cost of adjustable-rate mortgages (or ARMs) very tempting but are eventually dissuaded by the considerable amount of uncertainty involved.
A Fixed-rate mortgage (or FRM) payment security, but they are more expensive.

Potential home buyers are most impressed with an adjustable rate mortgages ability to take advantage of falling rates without refinancing. Instead of having to pay a whole new set of closing costs and fees, borrowers using the adjustable-rate mortgages just sit back and watch their rates fall. But to the contrary rates and payments can rise significantly over the life of the loan. A 6% adjustable-rate mortgage can end up at 15% in just four years if rates rise.
Adjustable-rate mortgages are more than just hard to understand for the average person. Lenders have much more flexibility when determining margins, caps, adjustment indexes and other things, so the average Joe can easily get confused or trapped into the wrong mortgage  by unscrupulous mortgage companies. To be certain of the best deal for you be sure to contact one of our trained mortgage professionals to help educate you to the best deal available.

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In a fixed-rate mortgages (or FRM) payments and rates remain constant. There aren’t any surprises even if inflation surges out of control and mortgage rates head to 20 percent. Your rate is your rate. A fixed-rate mortgage has stability which makes budgeting easier. People can manage their money with certainty because their mortgage payments don't change and they are easy to understand, no variances or financial mumbo jumbo to wade through. Fixed-rate mortgages can be too expensive for some borrowers, especially those who are in high-rate environments because there is no early-on payment or break in rate.

These and other factors should be considered when deciding which mortgage option is best for you. To get the best rates and options possible for you and your families financial situation it is advisable to use our mortgage calculator to look at all the numbers and then contact a mortgage professional.

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