Choosing between fixed and adjustable rates
How do you choose between fixed and adjustable rates?
Statistics show that home buyers who have chosen ARMs since 1981 have saved thousands of dollars. For a period, the percentage of home buyers applying for ARMs rose substantially, then buyers and homeowners began flocking to fixed-rate loans.
Whether to opt for a fixed or adjustable rate mortgage is a matter of personal choice. The first route offers stable payments; the second offers lower initial payments.
Another consideration is the length of time a buyer plans to own the home. If you’re planning on moving within three or four years, an ARM makes sense even if rates do nothing but rise during that period of time.
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