| Which One Should You Choose? | | | | is very important for you in the overall management of |
| Choosing between a fixed rate loan and aa adjustable | | | | your finances. Put another way, over the long pull, you |
| rate loan is one of the most perplexing choices | | | | may end up having paid somewhat more in interest |
| anyone can make. With a fixed rate loan, you know | | | | but you will have gained considerable peace of mind |
| exactly where you stand today, and where you'll stand | | | | over the long term. And that is certainly worth |
| any number of years from today. The fixed rate is | | | | considering. |
| easy to understand, and it holds no surprises for you. | | | | One More Perk |
| The adjustable rate loan may look more attractive | | | | Another feature of the adjustable rate loan should be |
| because it will generally have a lower starting interest | | | | noted: commonly, adjustable rate loans are assumable |
| rate. And, of course, there's always the hope that | | | | by a creditworthy buyer. In other words, having an |
| interest rates may go down. In deed, in recent years, | | | | assumable loan might make it easier for you to sell |
| the have gone down. | | | | your home in the future; if the buyer wants to take on |
| How To Decide | | | | your existing assumable loan. |
| One of the simplest rules of thumb in making the | | | | How They Sweeten The Pot |
| choice is to determine as best you can, how long you | | | | Many lenders offer added attractions to their |
| expect to be living in the dwelling, with the mortgage. If | | | | adjustable rate plans, and new ones are occasionally |
| the base rate on the adjustable loan is 2 to 3 | | | | introduced. There are special plans for first-time |
| percentage points lower than the fixed rate that might | | | | buyers. There plans that allow very low down |
| be otherwise be available to you, and if you are | | | | payments, with outside parties (such as an employer) |
| reasonably certain that you will be in the house no | | | | being permitted to contribute part of the down |
| longer than three to five years, then the adjustable | | | | payment. There are plans that start out as adjustable |
| rate loan will probably be better for you. On the other | | | | rate loans which carry an option to switch at some |
| hand, if you expect to be in the house for five to | | | | later time to a fixed rate loan. And there are plans that |
| seven years or longer, the fixed rate loan will probably | | | | start off at a fixed rate but can be converted to an |
| be better for you. It won't necessarily be cheaper over | | | | adjustable rate at some agreed upon future time. |
| the long run, but it will be more stable, and that stability | | | | |