Types Of Loan Programs: Fixed vs. Adjustable
Wondering if a fixed rate loan is best for you, or should you opt for an ARM?
One of the first choices a homebuyer will need to make is whether you want a fixed-rate or an adjustable-rate (ARM) mortgage loan. The bulk of loans will fit into one of these two categories, however, there is a third option that will allow you to “hybrid” the two.
- An adjustable-rate mortgage, (ARM): The interest rate of the mortgage adjusts periodically based on market conditions. For example, your payment will go up if rates go up and go down if rates go down.
- Fixed-rate Mortgage: Unlike an adjustable-rate mortgage the interest rate is set at the time you take out the loan and will not change. Fixed-rate home loans can be 10 years, 15 years, 20 years or 30 years fixed. 30-year fixed is the most common because it allows your mortgage payment to be the lowest.
- Hybrid ARM: Features an initial fixed interest rate for a certain amount of time and then becomes an adjustable-rate for the remainder of the term. Standard terms are 3, 5, 7, or 10 yrs.
Contact Global Unity Mortgage and find out which loan type best suits your needs! We will take all the time necessary to explain how all the different programs work so as to make you comfortable enough to be able to make an informed and intelligent loan decision. Call us today at (860)872-9479, email us at firstname.lastname@example.org or request information right here on our website!
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