2006-06-23 19:53:50 · 4 answers · asked by ujwal g 1 in Business & Finance ➔ Investing
Contrary to what most realtors and mortgage brokers will tell you, fixed rate mortgages being the best choice is not a forgone conclusion.
Either way, you are making a bet. With a fixed rate mortgage, you are locking in the term structure of interest rates at that time. With a floater, you are betting that the term structure overestimates the variables that move the index being used (inflation, investor preferences, etc.) The fixed rate caps the downside of making a mistake. So, how well do you understand capital markets and what are your expectations? and what are your risk preferences? These should drive your decision. You also need to consider the present value of the tax shield given your specific income tax situation.
2006-06-24 05:31:43 · answer #1 · answered by Homer J. Simpson 6 · 0⤊ 0⤋
The way things are going the interests rates are gonna rise steadily i'd recommend a fixed rate.
2006-06-24 02:57:34 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Always choose a fixed rate unless you plan to refi in a year or two. Variable interest rates are no good for long-term loans. TRUST ME.
2006-06-24 02:56:29 · answer #3 · answered by Anonymous · 0⤊ 0⤋
15 year fixed
2006-06-24 22:29:51 · answer #4 · answered by badmts 4 · 0⤊ 0⤋