Is an adjustable rate home loan right for you? While fixed rate home loans offer stability for long-term budgeting, they don’t take advantage of changes in the interest rates that could be to your benefit. Do you have personal income increase expectations and desire to stabilize your budget? Want to seek better rate terms once your rate becomes adjustable? Or, are you thinking of holding on to your home for only a short amount of time and want to start out with lower interest rates? An adjustable rate home loan may just be the thing for you. Don’t shop for a home loan until you’ve investigated adjustable rate mortgages (ARM). The usual ARMs are 3/1, 5/1 and 7/1. Which one is right for you really will really depend on how long you intend to keep your home, whether you’re saving money and how comfortable you are with a short-term set mortgage rate. Adjustable rate mortgages aren’t the only option out there, but they certainly are one of the more popular options. If you plan on flipping your home in a 3-7 year period, then an adjustable rate mortgage may be exactly what you’re looking for.
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