Fixed Rate Mortgage vs. Adjustable Rate Mortgage
The most basic distinction between types of mortgages that are available when you're looking to finance the purchase of a new home is how the interest rate is determined. Essentially, there are two types of mortgages - fixed rate mortgage and an adjustable rate mortgage. If you choose a fixed rate mortgage, the rate of interest that you are paying on your mortgage remains the same throughout the life of the loan no matter what general interest rates are doing. In an adjustable rate mortgage, the interest rate is periodically adjusted according to an index that rises and falls with the economic times. There are advantages and disadvantages to either, and no easy answer to 'which is better, a fixed rate mortgage or an adjustable rate mortgage?
The main advantage to a fixed rate mortgage is stability. Since the interest rate remains the same over the entire course of the loan, your monthly payment is predictable. You can count on your monthly mortgage payment to be the same amount each month. On the minus side, because the lending institution gives up the chance to raise interest rates if the general interest rates rise, the interest on a fixed rate mortgage is likely to be higher than that of an adjustable rate mortgage.
A fixed rate mortgage loan makes the most sense for those that are going to settle into their home for many years. While the initial payments may be larger than with an adjustable rate mortgage, stretching the payments over a longer period of time can minimize the effect on your budget.
An adjustable rate is one that is adjusted periodically to take into account the rise or fall of standard interest rates. Generally, the adjustable term is annual - in other words, once a year the lending company has the right to adjust the interest rate on your mortgage in accordance with a chosen index. While adjustable rate mortgages make the most sense in a situation where interest rates are dropping, though it's dangerous to count on a continued drop in interest rates.
Lenders often offer adjustable rate mortgages with a very low first year 'teaser' interest rate. After the first year, though, the interest rate on your mortgage can increase by leaps and bounds. Even so, there are limits to how much an adjustable rate can actually adjust. This is dependent on the index chosen and the terms of the loan to which you agree. You may accept a loan with a 2.3% one year adjustable rate, for instance, that becomes a 4.1% adjustable rate mortgage on the first adjustment period.
Finally, there's a new kind of loan in town. A hybrid between adjustable rate mortgages and fixed rate mortgages, they're known as 'delayed adjustable' mortgages. Essentially, you lock in a fixed rate of interest for a number of years - say 3 or 7 or 10. At the end of that period, the loan becomes a 1 year adjustable rate mortgage according to terms set out in the agreement you sign with the mortgage or financial institution.
Joseph Kenny is the webmaster of the loan information sites http://www.selectloans.co.uk/ and also http://www.ukpersonalloanstore.co.uk.
 Google News Updated : Mon, 06 Oct 2008 14:48:34 GMT Angelina Jolie Debuts New Movie and New Ink - Actress Archives
Actress Archives - Angelina Jolie and Brad Pitt recently attended the movie premiere for Jolie’s new film “The Changeling” directed by Clint Eastwood, and the film wasn’t the only thing on display. Video: Angelina Jolie and Brad Pitt at Premiere Angelina Jolie’s New Tattoo Publ.Date : Mon, 06 Oct 2008 14:09:31 GMT Ask.com Sails into Semantic Search to Differentiate from Google - eWeek
eWeek - By Clint Boulton Ask.com's search engine market share is minimal at best, but the company keeps on plugging away in application development to keep from being extinguished by Google, Yahoo and Microsoft. Ask.com Amps Up Search Again Ask.com, now with more answers Publ.Date : Mon, 06 Oct 2008 13:04:07 GMT Mammals facing extinction threat - BBC News
BBC News - By Richard Black At least 25% of the world's mammal species are at risk of extinction, according to the first assessment of their status for a decade. Many, many mammals face extinction One Quarter of World's Mammals Face Extinction Publ.Date : Mon, 06 Oct 2008 12:37:47 GMT PGA -- 2008 Turning Point Championship Recap - Pro Fantasy Sports
Pro Fantasy Sports - Hello in the second of the “Fall Finish” series, a unknown rookie birdied the 72 nd hole to earn a hefty paycheck and a spot on the PGA tour for the next two years. Johnson earns first win at Turning Stone Rookie posts first victory Publ.Date : Mon, 06 Oct 2008 14:07:14 GMT For Some Animals, There's No Place at Home - U.S. News & World Report
U.S. News & World Report - By Amanda Gardner MONDAY, Oct. 6 (HealthDay News) -- Exposing your children to the joys of pet ownership may, in some cases, also mean exposing them to infections and injuries. Keep Kids From Exotic Animals, Docs Say Doctors: No hamsters or exotic pets for young kids Publ.Date : Mon, 06 Oct 2008 13:06:44 GMT Postseason ace Beckett shelled as Angels win 5-4 - The Associated Press
The Associated Press - BOSTON (AP) - Josh Beckett waited four extra days for a chance to show his postseason brilliance. That shine wore off with his very first pitch. Video: Angels, White Sox Each Force a Game 4 Red Sox's injuries could prove costly vs. Angels Publ.Date : Mon, 06 Oct 2008 14:11:21 GMT Obama accuses McCain of looking for distractions - CNN
CNN - (CNN) -- Sen. Barack Obama on Sunday charged that Sen. John McCain's campaign is launching "Swift boat-style attacks" on him instead of addressing the country's problems. Health Care: Coverage -- But at What Price? Health Care Destruction Publ.Date : Sun, 05 Oct 2008 19:30:50 GMT Add RSS Feeds To My Web Pages |
PARLOT::Ebooks, Scripts,
Websites, and more... A repayment mortgage is the type of mortgage that most... Read More Refinance mortgage rate is the best rate available to qualified... Read More This might not be the front page news but it... Read More Dealing with mortgage companies online can enable you to get... Read More One of the biggest reasons homeowners refinance their mortgage is... Read More We all know that there are a lot of mortgage... Read More You have seen the Commercials on TV go this or... Read More A pension mortgage may seem lucrative at the first sight.... Read More Buying a house is a very important step in your... Read More Unfortunately, most Americans still do not understand how home loans... Read More Reverse mortgages used to be considered the last resort of... Read More Finding the right buy to let mortgage is crucial to... Read More The biweekly mortgage has been around for years but with... Read More Are you looking for the best buy to let mortgages... Read More Refinancing a mortgage is simply taking out a new mortgage.... Read More For many seniors one of their greatest sources of security... Read More Refinancing can be a very simple process. You fill out... Read More Home equity loans are a popular way for homeowners to... Read More Online real estate mortgage loans enable borrowers to be sure... Read More Your search for a mortgage isn't leading results.Check for any... Read More Private lenders, banks, and mortgage companies are all setting up... Read More Imagine this: you've found the perfect house, and feel lucky... Read More Today, FHA will loan up to 97 percent of the... Read More USA ECONOMIC CONDITIONSToday's sluggish economy has left millions of people... Read More A mortgage is a loan you take out to buy... Read More
Adsense
websites
What is a Repayment Mortgage?
Refinance Mortgage Rate and Mortgage Rates
Bad Credit Loans Authenticate What Is Positive About Bad Credit
Bad Credit Home Loans - Dealing With Bad Credit Mortgage Companies Online
Why Refinance Back into a 30-Year Loan?
4 Things to Watch Out for When Choosing a Mortgage Company
The Real Truth About Those: Online Get a Better Loan Web Sites - 6 Things to Look For
The Truth behind Pension Mortgages
Using a Calculator to Assess Your Loan
Home Loan Confusion Continues
Reverse Mortgage ? Be Sure You Need It Before Applying For One
Buy to Let Mortgages
Biweekly Mortgage
Best Buy to Let Mortgages
Refinancing Your Mortgage Can Really Save You Money
Reverse Mortgage Providing Peace of Mind Without Sacrificing Safety or Security
Refinancing Mortgage Loan - Get The Lowest Interest Rate You Can When Refinancing
Home Equity Loans
Real Estate Mortgage Loans Online
Essence of Self Certified Mortgages
Obtaining a Home Equity Loan Online
New Home Loan - 3 Tips To Speed Up The Mortgage Loan Approval Process
Some Mortgage Loans are Available with Absolutely no Money Needed From You
Mortgage Reduction Solutions
Selecting the Right Mortgage for You
Affordable and Reliable Web Hosting Starting at $4.49/Month
How to Find the Lowest Rate Possible!
The quest is on! You're in the market for a... Read More
What is the PayOption ARM?
Imagine an adjustable rate mortgage that allows you to pick... Read More
Who Could Benefit From A Reverse Mortgage?
What is a "Reverse Mortgage?"Also known as a Home Equity... Read More
Thinking About Re-mortaging? Read These Tips First
More and more of use are signing up for limited... Read More
Tips On New York Mortgage Refinance Loan
Many homeowners want to know if it worth taking a... Read More
Should You Refinance?
There are several reasons that might make someone consider refinancing... Read More
Home Equity ? Is it Time to Cash Out and Move?
During the last five years, home prices have increased nationwide.... Read More
Poor Credit Home Equity Loan Tips
A home equity loan can help repair your poor credit... Read More
Mortgage Calculator ? How to Calculate Your Monthly Mortgage Payment
Just starting to shop for a new home? Do you... Read More
Why a Mortgage Professional Beats a Banker Every Time -- The Story Tells It All
The best way to explain why a mortgage professional is... Read More
Home Loans: Where Do I Begin?
So you've finally decided you've had enough of paying rent... Read More
Home Equity Loans
Home equity loans are a popular way for homeowners to... Read More
What is a Tracker Mortgage?
A tracker mortgage 'tracks' the Bank of England base rate,... Read More
Helpful Mortgage Advice
Mortgage advice overwhelming you? Many people get advice from everyone... Read More
New York Refinance - Refinancing in New York
If you are looking to refinance in New York, it... Read More
Home Refinancing Scam ? Thieves Use Identity Theft to Steal Your Equity
Since the demise of the stock market in 2000, the... Read More
A Guide to Finding the Cheapest Home Improvement Loan
To find the cheapest home improvement loan that you can,... Read More
Desperately Seeking Good Leads, The Adventure Driven Loan Officer
As loan officers, the word "lead" is by far one... Read More
Poor Credit Mortgage Reigns High Among Mortgages Available to Bad Credit Borrowers
Like a big brother keeping notes of the erring behaviour... Read More
Your Mortgage Rate Compare and Save
When trying to obtain the best mortgage rate compare offers... Read More
Refinancing Your Home Mortgage Loan
You're considering refinancing your home mortgage loan to save money.... Read More
Home Owner Loans Explained
How To Release Equity Locked Up In Your Home For... Read More
Buying a House or a Home?
A house is just that, a house, until someone lives... Read More
Home Equity Line of Credit - Finding The Best Home Equity Lender
Borrowing against the value of your home using a revolving... Read More
Financing the Purchase of Foreclosed Homes
Homes that have been foreclosed can be one of the... Read More
Mortgage Refinance |