Over the past several years, many people have developed some strong opinions against an adjustable rate mortgage. However, there are actually several reasons that this type of mortgage is still relevant in today’s society. Is this the right decision for you? Learn more about this mortgage below in order to find out.
Low Interest Rates
One of the best things about this type of loan is that it allows you to save a great deal of money when it comes to the interest that you begin paying on your home. Typically, your ARM rate will be significantly lower than a fixed rate, which allows you to save money. To help increase the value, consider adding the savings to the principle of your home in order to pay it off faster.
Adjustable rate mortgages are especially attractive to those who do not plan to stay in their home for an extended period of time. This could be those who are only at a location temporarily or who are simply looking to upgrade their home not long after purchasing it. Regardless, this type of loan will help them to save money in the short run so that they can move on quickly.
Most people believe that ARM rates will only increase as time progresses. However, the opposite is actually true as well. When the rates are down, your loan payment will also decrease. This allows you to pay more towards the principle of your home and less to the interest.
If you are considering an adjustable rate mortgage, be sure to contact us today.