Submitted by: C. Grisham
If it s your first time getting a home loan, don t get confused there are a lot of home loan applicants like you who each have their own unique individual needs which the mortgage industry would need to meet, thus the many different types of mortgages with equally numerous and varied features. The interest rates, however, just vary between two forms: adjustable or fixed rate. Evidently, a fixed rate mortgage is the form of interest rate where it stays the same and monthly payments remain fixed until the loan is fully paid or reaches maturity. So for a long as the loan will be, the amount fixed at the start of the loan will remain the same until the end of it.
On the other hand, an adjustable rate mortgage, also called floating or fluctuating rate, is one where the interest rate can change and fluctuate along with the changing times. The rate could go higher or lower depending on factors such as politics, finances, and economics that change at any given point in time. Having said that, who s to say which one is better? Where can you get home loan advice worth your time?
Fortunately for use, websites can be found in the internet for our benefit. Good sites have a home loan calculator, guides and advice for people who are looking into getting themselves their own home through a home loan. Such sites can offer valuable information and help when it comes to decisions such as these. So, which one would be ideal? Well, it depends. Each one has its own advantages and disadvantages. We can go ahead and list them all down but the bottom line is that it would all depend on your personal preference coupled with your current and projected financial status and more importantly, your future financial capabilities. There is a general rule of thumb though: choose adjustable rate mortgage if you aren t really planning to spend your life in the home you re getting the loan for. If you plan to be changing homes after a relatively short period of time, then undoubtedly, the choice should be adjustable rate. Of course the obverse applies, so if you plan to live out your years in that home and let your kids and your kids kids inherit it in the far future, then fixed rate would be ideal.
Having somewhat delineated fixed and adjustable rates, you should now know about home ownership. Having taken out a loan from a lender to be able to purchase the home, you will be co-owning that home with your lender until you ve repaid the loan thereafter full ownership will be yours. As monthly repayments continue, your level of ownership increases until you ve paid off the entire loan plus accrued interest, which would be normally after 20 to 30 years, maybe more. As such, you can take advantage of your share of the home to apply for a home equity loan for other expenses if the need ever arises.
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