Owning Your Own Home With An Adjustable Rate Mortgage
Buying a home is an endeavor that involves making many significant financial decisions. A major factor that determines the overall amount of money you will ultimately spend on your home and what your monthly mortgage payment will be is the mortgage rate that you obtain. One common type of mortgage rate is an adjustable rate mortgage, where the interest rate changes periodically over the duration of the loan, and can often be favorable for the borrower. If you are ready to buy a home in Conyers, Georgia, and want to learn more about your mortgage rate options, Preferred Capital Funding can help. Continue reading to learn more about buying a home with an adjustable rate mortgage.
How Does An Adjustable Rate Mortgage Work?
The interest rate in an adjustable rate mortgage, (or ARM), varies throughout the loan term, which means that basically the interest either raises or decreases. Initially, with this type of loan, the interest rate remains fixed for a period of time, and usually during this time, this initial interest rate is lower than that of a fixed rate mortgage. Then, after that specific time period, the ARM interest rates begin to change depending on current economic benchmarks. It is important to note that in some instances, when an adjustable rate mortgage rate increases, a borrower may need to pay a higher interest rate than a fixed rate mortgage. Fortunately, there are limits that help a borrower from severe interest rate hikes in adjustable rate mortgages.
What Are The Advantages Of Opting For An Adjustable Rate Mortgage?
Obtaining an adjustable rate mortgage can offer borrowers several benefits. First of all, it can be a very advantageous option for a borrower who is looking to relocate after a couple of years and is able to take advantage of the lower initial interest rate at the beginning of an ARM and pay off the mortgage before the interest rate can increase. Additionally, during this time of a lower initial interest rate, a borrower also may be able to either save or invest the money they save during the period of low interest. An adjustable rate mortgage can help borrowers take advantage of decreased interest rates without having to refinance the loan and help them avoid paying those associated refinancing and closing cost fees.
Getting Assistance With Applying For An Adjustable Rate Mortgage
There are many decisions a potential homeowner must make when buying a home, and some of them can help save a borrower a significant amount of money. Depending on your unique situation, an adjustable rate mortgage may be able to offer some excellent benefits. If you are looking to buy a home in Conyers, Georgia, the loan specialists at Preferred Capital Funding can work closely with you to determine your best mortgage option. Contact us today for a consultation.
