When shopping for home loans today, you will eventually have to decide if you will get a fixed-rate mortgage or an adjustable-rate mortgage. These two have their advantages and disadvantages. To help you make up your mind on what mortgage to get, you can look at the comparisons below.
Many homeowners go for fixed-rate mortgages due to their reliability. This type of home loan has fixed interest rates for the entire term. This stability allows you to continue repaying the same amount no matter what happens to the country’s economy. At the same time, you can easily budget your finances with such a loan.
Sadly, fixed-rate mortgages can also be expensive, and they rarely vary from lender to lender. But Community Lending Group notes that even if you do lock in on a high-interest rate for a mortgage in Salt Lake City, you can still refinance to a lower rate later on. When you plan to live in the same house for the long-term, fixed-rate mortgages can fit your needs.
On the other hand, adjustable-rate mortgages come with significantly lower interest rates. These rates will only be available during a set period of years, however, after which the rate will increase to great proportions. Such an eventuality can cause a problem if you do get an adjustable-rate mortgage.
Fortunately, you can refinance to a fixed-rate mortgage once the adjustment period comes close. This way, you can still take advantage of the low rate of an adjustable-rate mortgage. You can also buy a larger house with an adjustable-rate mortgage.
Evaluate your circumstances, your finances, and any future possibilities, and then choose the best mortgage for you. If things go bad, you can still refinance here in Salt Lake City.