Posted on: 13th Sep, 2009 06:57 am
what are the benefits of adjustable mortgage rates
As the economy moves one's mortgage loan interest rates also varies.If the overall rates from centralised bank are reduced then the interest rates are also decreased thus good sign forthe borrower with lower EMI's.
but it can turn out to be vice-versa as well.
but it can turn out to be vice-versa as well.
right now mortgage rates are lowest. therefore in present scenarion it is recommended not to opt for adjustable rate mortgage.
if you are paying higher interest rate, you are the right candidate for refinance it to fixed mortgage.
if you are paying higher interest rate, you are the right candidate for refinance it to fixed mortgage.
There is pro and con
If the rate stay where they are or go down that is good for the borrower
If the rates go up then it is bad
If the rate stay where they are or go down that is good for the borrower
If the rates go up then it is bad
Benefits of our adjustable rate mortga
Lower interest rate and lower payments resulting in more money to invest for our long term goals.
If interest rates were to drop when our loan adjusts, we would automatically be able to have the lower rate.
Ability to save money if we dont stay in the house long term.
Lower interest rate and lower payments resulting in more money to invest for our long term goals.
If interest rates were to drop when our loan adjusts, we would automatically be able to have the lower rate.
Ability to save money if we dont stay in the house long term.
The prime importance of adjustable rate mortgages is nothing but lower monthly payment. The bank rewards you with a lower initial rate because youre taking the risk that interest rates could rise in the future.
In case of fixed rate mortgage bank take the risk at higher side. Consider what happens if rates rise: the bank is stuck loaning you money at a below-market rate when you have a fixed rate mortgage. On the other hand, if rates fall, youll simply refinance and get a better rate.
In case of fixed rate mortgage bank take the risk at higher side. Consider what happens if rates rise: the bank is stuck loaning you money at a below-market rate when you have a fixed rate mortgage. On the other hand, if rates fall, youll simply refinance and get a better rate.