Mortgages: Fixed-Rate vs. Adjustable-Rate
If you've started perusing home listings, now's the time to start thinking about which type of home loan is right for you: a fixed-rate or an adjustable-rate mortgage (ARM). Fit Mortgage can help with that decision.
Fixed Rate Mortgage
A fixed-rate mortgage carries the same interest rate and monthly payment over the life of the loan. This stability can bring peace of mind to many home buyers.
Adjustable Rate Mortgage (ARM)
ARMs are designed so their interest rates can go up or down over the life of the loan. Generally, with an ARM, you'll get a lower initial interest rate, but it can rise or fall at specified intervals.
Learning the lingo
An ARM's interest rate is tied to a public financial index, such as a U.S. Treasury note. These loans come with two caps: one to limit how much the rate can climb at each adjustment, another to limit the increase over the life of the mortgage. ARMs are listed as 1/1, 3/1, 5/1, and so forth. The first number shows how many years the initial fixed rate will last. The second number indicates how often the interest rate will be adjusted after that. The "1" in the examples indicates an annual adjustment. The home loan specialists at Fit Mortgage can show monthly mortgage comparisons to help you decide which type of loan is best for you.
Stop by or call us today at (818) 524-1680. No matter what type of mortgage you choose, Fit Mortgage offers service you can't resist.
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