Fixed & ARM mortgage: Advantages

When buying a property, you need to choose between a fixed interest rate
(that remains constant through the life of the mortgage) or an adjustable
(adjusted up or down - at specified times during the mortgage term).

Adjustable Rate Mortgages (ARM) will have an initial interest rate lower
than fixed rates but will adjust upward (unless rates really fall) after a
specified period. ARM may be good choice if you are sure thta you will not
be owning the home for an extended period (more than 5-6 years) of time.

Today we discuss Advantages of both types of mortgages. Tomorrow we
will post disadvantages of both.

Fixed: o No anxiety over interest rate fluctuations. o Since you know
what your payment will be for the life of the loan, you can budget more
easily. o No possibility of an interest rate change making your mortgage
amount suddenly unaffordable.

ARM: o Lower initial rate and so lower monthly payment. o If interest rate
declines your rate will also decline. o Easier to qualify for due to lower
monthly payment which increases your affordability too.