WARNING! "Read This BEFORE You 'Sign Up' For An Adjustable Rate Mortgage And Get Stuck On The Interest-Rate Rollercoaster..."
Let's face it, in today's uncertain times picking the wrong mortgage could send you broke or bankrupt - fast!
That's why you need to understand all your options before making a commitment.
Today, as the financial markets are in trouble, even experienced loan specialists crawl under a rock. So you need to be well informed, use your discernment and never make a rushed decision.
Become a smarter shopper and a better money manager - understand the basics of borrowing...
Before taking on a mortgage, make sure you understand the type of the mortgage you need. An adjustable rate mortgage provides both different benefits and disadvantages to a fixed-interest mortgage.
An adjustable rate mortgage, allows the rate to fluctuate with the market during the term of the loan. So, it's hard to predict, especially in today's uncertain times, what your monthly repayments are going to be 2 months, 3 months from now or even next month.
Adjustable rates transfer part of the interest rate risk from the lender to the borrower. They can be used where unpredictable interest rates make fixed-rate mortgage difficult to obtain. The borrower benefits if the interest rate falls and loses out if interest rates rise.
On the other hand, if you need to know exactly how much you'll be paying every month, and for how many months, then you might want to go for a fixed-rate mortgage.
A fixed-rate mortgage allows you to lock in the current rate for a chosen term. You could fix your mortgage for 12 months, 2 years, 3 years and in some cases even up to 10 years.
Which rate is right for you?
If rates are rising, you might avoid an adjustable-rate mortgage, because the interest you'd pay would go up and you'd end up paying more at the end of the month.
Of course, the opposite is true in periods when interest rates are falling. Then you'd likely want an adjustable-rate mortgage so you can pay less interest as rates fall.
With a fixed-rate mortgage, your interest rate will not go up for the chosen term and so there'll be no nasty surprises. You know exactly what your mortgage repayments are at the end of each month. But, you should be careful about becoming complacent and then paying too much interest if there's been a big drop in interest rates.
If you choose an adjustable-rate mortgage, it is difficult to predict what your future monthly payments will be.
Adjustable-rate mortgages are the products where the interest component varies with time. Depending on the market situations, the interest rates may fluctuate. It is possible that these rates may either go down or even go up.
Depending on how these interest rates change, the financing companies generally keep adjusting the repayment period or the monthly payment to match the interest rate.
It is true that the rate of interest charged in case of an adjustable-rate mortgage is usually lower than the fixed-rate mortgages. However, over the lifetime of the mortgage, it becomes difficult to 'predict' or even to asses if an adjustable rate mortgage will work in your favor or not.
A mortgage taken on an adjustable rate of interest allows a person to get hold of a higher mortgage amount, especially if the person is salaried and has a fixed source of income.
With adjustable rate of interest being lower, the monthly payments are lesser and hence it is easier of a person to pay it back.
Hence it is very likely that in the long run, an adjustable-rate of mortgage could work out to be cheaper than a fixed-rate of mortgage in your situation.
However, there is no guarantee to this and it is possible that the interest rates may move up. And this could change the entire scenario. However, there are some ways to reduce such risk. Some of which you can find about on this website.
Go ahead and check out the free articles, useful tips and links on this page so you don't make an ill-informed decision when taking on a mortgage. That could send you broke or even bankrupt!
The free guides, links and articles on this page, should answer all your other questions about choosing a mortgage that's right for you.
Thanks for visiting this website and happy mortgage hunting.
That's why you need to understand all your options before making a commitment.
Today, as the financial markets are in trouble, even experienced loan specialists crawl under a rock. So you need to be well informed, use your discernment and never make a rushed decision.
Become a smarter shopper and a better money manager - understand the basics of borrowing...
Before taking on a mortgage, make sure you understand the type of the mortgage you need. An adjustable rate mortgage provides both different benefits and disadvantages to a fixed-interest mortgage.
An adjustable rate mortgage, allows the rate to fluctuate with the market during the term of the loan. So, it's hard to predict, especially in today's uncertain times, what your monthly repayments are going to be 2 months, 3 months from now or even next month.
Adjustable rates transfer part of the interest rate risk from the lender to the borrower. They can be used where unpredictable interest rates make fixed-rate mortgage difficult to obtain. The borrower benefits if the interest rate falls and loses out if interest rates rise.
On the other hand, if you need to know exactly how much you'll be paying every month, and for how many months, then you might want to go for a fixed-rate mortgage.
A fixed-rate mortgage allows you to lock in the current rate for a chosen term. You could fix your mortgage for 12 months, 2 years, 3 years and in some cases even up to 10 years.
Which rate is right for you?
If rates are rising, you might avoid an adjustable-rate mortgage, because the interest you'd pay would go up and you'd end up paying more at the end of the month.
Of course, the opposite is true in periods when interest rates are falling. Then you'd likely want an adjustable-rate mortgage so you can pay less interest as rates fall.
With a fixed-rate mortgage, your interest rate will not go up for the chosen term and so there'll be no nasty surprises. You know exactly what your mortgage repayments are at the end of each month. But, you should be careful about becoming complacent and then paying too much interest if there's been a big drop in interest rates.
If you choose an adjustable-rate mortgage, it is difficult to predict what your future monthly payments will be.
Adjustable-rate mortgages are the products where the interest component varies with time. Depending on the market situations, the interest rates may fluctuate. It is possible that these rates may either go down or even go up.
Depending on how these interest rates change, the financing companies generally keep adjusting the repayment period or the monthly payment to match the interest rate.
It is true that the rate of interest charged in case of an adjustable-rate mortgage is usually lower than the fixed-rate mortgages. However, over the lifetime of the mortgage, it becomes difficult to 'predict' or even to asses if an adjustable rate mortgage will work in your favor or not.
A mortgage taken on an adjustable rate of interest allows a person to get hold of a higher mortgage amount, especially if the person is salaried and has a fixed source of income.
With adjustable rate of interest being lower, the monthly payments are lesser and hence it is easier of a person to pay it back.
Hence it is very likely that in the long run, an adjustable-rate of mortgage could work out to be cheaper than a fixed-rate of mortgage in your situation.
However, there is no guarantee to this and it is possible that the interest rates may move up. And this could change the entire scenario. However, there are some ways to reduce such risk. Some of which you can find about on this website.
Go ahead and check out the free articles, useful tips and links on this page so you don't make an ill-informed decision when taking on a mortgage. That could send you broke or even bankrupt!
The free guides, links and articles on this page, should answer all your other questions about choosing a mortgage that's right for you.
Thanks for visiting this website and happy mortgage hunting.