All Posts Tagged: fixed rate

Adjustable vs. fixed-rate mortgage: How do I know which is right for me?

Victor Polich
Mortgage Banking

There are many loan types available, and knowing which one is right for you isn’t always an obvious choice.

Rear view of young couple looking out huge glass wall of their house into an expansive yard as they ponder the future and moving boxes behind them.Thinking about your personal situation and goals, you’ll discover that part of the loan process will include you deciding on a fixed or adjustable rate.

What is the difference?

A fixed-rate mortgage is just that – a loan that has a fixed rate for the life of the loan term you choose. An adjustable-rate mortgage (ARM) loan has a lower initial interest rate (creating a lower payment), and then can adjust at various intervals throughout the loan term.

Making sure you are educated about the advantages of both products will help you decide which is right for you.

Fixed-rate mortgage benefits
  • Rate remains constant for the entire term of the loan, regardless of what happens in the broader economy (e.g., interest rate increase).
  • Payment (principal and interest) remains constant for the entire term of the loan, making monthly budget planning easier.
ARM benefits
  • Lower initial interest rates vs. fixed rate option.
  • Payment (principal and interest) is initially lower.

Other items to ask yourself:

  • How long will I be in this home? According to the National Association of Realtors, on average people live in their home for 10 years.
  • Would I benefit from a lower initial payment with an ARM if I plan on moving soon?
  • Am I prepared to make higher mortgage payments if my ARM adjusts with the market or at the end of the initial term?
  • Do I fully understand how my ARM product works today and in the future?

Hopefully this helps clarify these two borrowing options.  In every situation speaking with a mortgage expert today will help set you up to achieve your own personal goals for home ownership in the future.

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Numbers Count: Housing snapshot looks bright

Chad Royle
Posted by Chad Royle
Mortgage Banking
Side shot of brick condo building with balconies, in Seattle at sunset.

Here’s my take on the key numbers on the housing market this week.

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Numbers Count: Steady climb for mortgage rates ahead?

Chad Royle
Posted by Chad Royle
Mortgage Banking
Two women, one holding a tablet, looking up at a white two-story house with upper and lower balcony/porch.

Here’s my take on the key numbers on the housing market this week.

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