What's better fixed or adjustable mortgage?
Answers:
If you can get a low fixed rate GET IT. Adjustable is a little risky and your at the mercy of the market.
FIXED
Without a doubt, a fixed rate mortgage is better...that way, the interest rate cannot go up, like with an adjustable rate mortgage. You would have to refinance to get a fixed rate, an adjustable cannot just become fixed.
In the long run its been proven that variable rate mortgages will save you more money. But, considering that the interest rates will likely climb somewhat, right now is probably a good time to go for a fixed rate. With most banks you can always change after your term is up (within your amortization period of course). Fixed rates may also work better for a budgeter since your payments are always the same.
fixed yes
Always FIXXED. Dont get screwed by the adjustable rates.
There is no pat answer to this one. What type of loan is best for you depends on your individual circumstances, future plans, and goals.
There are many different loan types because investors want to be able to offer the best alternative to the widest range of borrowers. What may be just right for one may be totally wrong for another.
Yes, some adjutables offer an opportunity to fix the rate a specific times but the fixed rate is usually one that is higher than the current market rate so most adjustable rate borrowers chose not to do so but to refinance into a fixed rate instead. In many cases they can take advantage of the streamline refinace procedure and avoid the costs of an appraisal and qualifying criteria.
Fixed rates are still low so adjustables are not as attractive right now although the 5/1 ARMS are still a good loan for those seeking a lower than market rate and know that they will be altering their mortgage needs by the end of the fixed period.
Fixed is definitely best-you'll lock in whatever the current rate is for the life of the loan.
Adjustable means it will change according to the fuctuation of the rates and that can be risky.
You wouldn't want to start with a 6.25% rate and then end up with a 13% later on.
Personally I would never get involved with an adjustable rate.
FIXED
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