which one is better to have if i buy a house now, fixed rate mortgage or adjustable rate mortgage?

Answer 1

Right now - fixed. You want to lock in the low rates. If the rates were high, you would choose an ARM, so that you could benefit when the rates go down. At this point, they can really only go up.

Answer 2

How long are you going to stay there for? If less than 5 years, why get a fixed if you can get a better rate on a 5 year ARM? There are many options nowadays and everyone’s situation is different. Speak with a mortgage broker and make sure they ask you many questions. If you go into a bank, you will be limited to what that bank offers. Most banks offer 5% of what mortgage brokers can offer so do your homework and educate yourself.



Right now the bond yield curve is inverted that a fixed rate may actually be the same as an ARM. In that case, DEFINITELY take the fixed rate. Now you also have to think of what type of payment you want, principal and interest or interest only. Contrary to what many believe, there now does exist a 30 year fixed rate loan with a 10 year interest only period. This keeps your payments low but locks in your rate. If you want to read more about loans and the different programs offered, check out www.ScottLushing.com

Answer 3

This completely depends on your goals and intentions for the property. Even adjustables can have a fixed rate for a short period. If your plans are long term a 30 yr fixed rate loan is excellent right now. If your plans are 5 years or less, an adjustable with a 2 - 5 year fixed period will provide a lower rate than a 30 year fixed and will accomplish what you want.

Here is some additional info. Hope this helps.

Answer 4

It depends. How long are you wanting to stay in house? When does mortgage product become adjustable (most are fixed for an initial period of time and then adjust)?

But as a general rule, I'd go with a fixed 30-year product. If rates go down, you can refinance into another fixed 30-year product and benefit. If rates go up, nothing happens.

I tend to prefer the 30-year product, because it minimizes my mandatory monthly outlay, BUT allows me to pay extra. Thus, I can "convert" it into a 20- or 25- year product by making early payments (confirm that no pre-payment penalty applies), but can make the 30-year minimums if I have something else come up in a particular month.

Maximum flexibility for me, minimum downside.

Answer 5

Depends on your financial status and if you can incur rising interest rates and rising monthly mortgage payments. Many people who took out ARMs' have defaulted on their mortgages and ended up having their homes foreclosed in the past decade or so. Stick with the traditional 15 or 30 year fixed rate mortgage, because once your rate is locked in, it won't ever change, unless you decide to refinance at a lower rate if the economy takes a hit and interest rates fall.

Answer 6

Generally it depends on your situation and how long you plan to stay in the house. BUT today interest rates are still at historical lows. It is unlikely that this low interest rate market will continue indefinitely. If your credit score qualifies you for a fixed rate at the current low levels go with a fixed rate definitely. It is so much easier to plan and budget when you do not have to worry about potential mortgage payment increases.

Answer 7

Depends on how long you intend on staying in the house. If you plan on moving in 3-5 years, an adjustable rate mtg. might be better for you. The monthly payment is generally less. Check your options closely and with different lending institutions before making a decision. This site will help www.bankrate.com

Good Luck on the new house!

Answer 8

fixed rate

The Fed is concerned with inflation now. The way they combat it is by raising the prime interest rate in increments until it cools the economy. Why get stuck in the endless upward spiral of interest rates?

the only exceptions are if you plan to move in less than five years or can't qualify for a fixed rate.

Answer 9

It's a gamble. If you think that rates are going to fall, get an ARM. If you think that rates are going to rise, get a fixed. Nobody can reliably predict when rates will rise of fall or by how much.

Answer 10

How long do you plan to be in the house? Will you rent it when you move? Many variables to consider, depending on your specific life scenario. Talk it through with an experienced Loan Officer and together come up with a game plan.