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Today, mortgage expert Todd Sevier joins us again to dig deeper into the lending process. Today he answers: What's the difference between a fixed-rate mortgage and an adjustable-rate mortgage?
A fixed-rate mortgage means that the rate you lock in when you are granted a loan remains the same for the duration of the loan. Some things, like taxes and insurance, can change over time, but the majority of your mortgage payment (the principal and interest) will never change. The most common loan is a 30-year fixed-rate, but you can also get loans for shorter periods.
An adjustable-rate mortgage is
typically going to have a lower start rate that will be fixed for a period of anywhere from 2-10 years. In that time frame, the rate will adjust. It can go up or down, depending on where the market is at that particular time. A rule of thumb when getting an adjustable rate is you should know what your future plans entail. If you get an adjustable-rate loan that will change in five years, do you plan on selling by then? If so, that loan may be a great option for you; if you're planning on living in the home for a longer period of time, you want to get a fixed-rate loan.
If you have any specific questions about this topic, or if you need real estate assistance of any kind, don't hesitate to reach out to us. You can reach Todd at (843) 408-0856 or by email at Todd@scmtgpro.com. We would love to hear from you!
A fixed-rate mortgage means that the rate you lock in when you are granted a loan remains the same for the duration of the loan. Some things, like taxes and insurance, can change over time, but the majority of your mortgage payment (the principal and interest) will never change. The most common loan is a 30-year fixed-rate, but you can also get loans for shorter periods.
An adjustable-rate mortgage is
typically going to have a lower start rate that will be fixed for a period of anywhere from 2-10 years. In that time frame, the rate will adjust. It can go up or down, depending on where the market is at that particular time. A rule of thumb when getting an adjustable rate is you should know what your future plans entail. If you get an adjustable-rate loan that will change in five years, do you plan on selling by then? If so, that loan may be a great option for you; if you're planning on living in the home for a longer period of time, you want to get a fixed-rate loan.If you have any specific questions about this topic, or if you need real estate assistance of any kind, don't hesitate to reach out to us. You can reach Todd at (843) 408-0856 or by email at Todd@scmtgpro.com. We would love to hear from you!
