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By W. Troy
Swezey
When looking for a mortgage to meet your needs, consider these key questions:
Is your income expected to increase in the coming years? How long do you plan
to live in your new home? And, which mortgage will provide the lowest
interest rate?
While 15 or 30 year fixed-rate mortgages are the most popular, and Adjustable
Rate Mortgage (ARM) offers some interesting alternatives for home shoppers
who plan to move again within four or five years. Although interest rates are
the lowest they’ve been in 20 years, an ARM provides even lower interest
rates during its introductory period.
An Adjustable Rate Mortgage is a home loan with an interest rate that
fluctuations with market interest rates. Instead of paying the same rate of
interest over the life of the loan, as you would with a fixed-rate mortgage,
you usually pay a lower interest rate the first four or five years. Your
interest rate then changes in accordance with certain rate indexes.
However, ARMS come with maximum caps on how much the interest rate can
increase in a single period (usually a year) and how high the rate can go
during the entire life of the loan. Usually, the overall maximum cap is six
percentage points, and the annual cap is two points
W. Troy Swezey is the author of “ADJUSTABLE RATE MORTGAGES OFFER ALTERNATIVES
FOR HOME BUYERS." As a Realtor at Century 21 Paul & Associates, he has helped
many individuals with their real estate needs. Visit his web site to download
his free e-book, “REAL ESTATE SECRETS EXPOSED.” http://www.TroyIsMyRealtor.
com (http://www.TroyIsMyRealtor.com) or mail to: TroyC21@usa.net
(mailto:TroyC21@usa.net)
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