Choosing Between Variable & Fixed Rate Mortgage - Which One Gets the Green Light?
March 22, 2012 Written by Administrator
Every homebuyer has to decide on whether to choose a fixed rate mortgage or a variable rate loan. Choosing between Variable & Fixed Rate Mortgage? Here’s how you can make the right choice.
Should I Get a Variable Or Fixed Rate Loan?
This is definitely a question that every homebuyer is faced with. Not knowing whether they should lock in to a fixed-rate loan or go with a variable rate mortgage is a major concern for most homebuyers new to the market. Today, short term loans in particular are at an all time low which might appeal to most people right now, but there are several factors that must be considered first. Sometimes it is good to have a variable rate loan, at other times it might not be so good.
The two categories that mortgages fall under are basically fixed rate mortgage and adjustable rate mortgage. This means that fixed rate loans have a fixed interest rate and an adjustable rate mortgage has an interest rate that changes over time. So how do you choose which mortgage type is best for your situation?
How to Find the Right Type of Mortgage Loan
The first thing is to do your research and understand how these two mortgage types work. Next, you will have to weigh the pros and cons of each type of loan. And lastly, you should make a choice based on your financial situation and your long term home ownership plans.
What’s the Verdict on Fixed Rate vs. Adjustable Rate Mortgages?
Well, this decision will depend entirely on you and your future housing plans. If you want to play it safe then go for a fixed rate mortgage. A fixed rate loan can give you the peace of mind you want. However, if you are a risk taker then an adjustable rate loan might be best suited for you.
The best thing to do is to talk to a few knowledgeable mortgage lenders. The more information you gather, the easier it will be to choose the right type of home mortgage loan. Go to a lender or contact a mortgage specialist who can help you decide on the type of mortgage that is best for you, your financial situation and your future housing goals.
Are you currently choosing between Variable & Fixed Rate Mortgage? Let us know in the comment section below. Thanks!
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