Thursday, July 27, 2006

Fixed Vs. Adjustable Rate Mortgages

Fixed and Adjustable Rate Mortgage Loans

If you are thinking about applying for a home-mortgage loan, make sure you are familiar with and understand the many loan options available to borrowers today. Mortgage lenders offer many different loan programs to choose from. Each loan structure affects your interest rate and monthly payments differently. The first decision to make when taking out the loan is whether to go with a fixed-rate or adjustable-rate mortgage (ARM).

A fixed rate mortgage is the most common loan program. With a fixed rate mortgage loan, your monthly payments will never change. Whether your loan set for 10 years or even 30 years, a fixed-rate mortgage loan is structured so that the interest rate remains consistent throughout the life of the contract. With interest rates on a steady rise, there has never been a better time to go with a fixed rate mortgage.

The alternative to the fixed-rate mortgage is the adjustable rate mortgage. An adjustable rate mortgage loan is designed to provide you with a reasonable monthly payment to start, however, your monthly payments are subject to change as interest rates may rise or fall over time.

Deciding which mortgage plan is right for you requires careful consideration of your current finances, how you expect your finances to change in the future, how long you plan on owning your home, and how you feel about your interest rate changing. Since each loan program offers different advantages, we recommend sitting down with a mortgage loan specialist to discuss which program best meets your individual needs.

Feel free to contact us with any questions or concerns you have regarding fixed or adjustable-rate mortgage loans at


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