2006-10-11 23:18:36 · 3 answers · asked by rishi68436 1 in Business & Finance ➔ Renting & Real Estate
It depends on your time line for keeping the loan and the direction that interest rates are going.
If you are only going to havethe loan for a short period of time, a floating rate is ok as long as you match the loan term to the time you need the loan.
If interest rates are going down then a floating rate until they do.Then you can refinance to a fixed rate.
Otherwise a fixed rate is better because your cost of borrowing is locked in and the only increase in monthly payment would be from rising real estate taxes or homeowner's insurance.
2006-10-11 23:31:02 · answer #1 · answered by waggy_33 6 · 0⤊ 0⤋
One is not superior to the other. They just have different features of the loan. The one that would be best for you depends on your situation and how long you intend to stay in your home.
Couple facts: approx. 80% + of people will never pay off their home loan completely, the avg. length that a loan is held is less than 3 yrs and people on avg. live in their homes for 7yrs.
So it depends on what your situation. If you get an adjustable loan your rate will be less than if you take a fixed loan.
2006-10-12 01:37:56 · answer #2 · answered by T 1 · 0⤊ 0⤋
i prefer a fixed. you're taking more of a gamble on a floating loan unless it is specified that the interest rate will not go above the rate at which you signed.
2006-10-11 23:26:11 · answer #3 · answered by oldguy 6 · 0⤊ 0⤋