Are you thinking to buy or refinance an existing mortgage? Then now during the ongoing scenario, there is a great opportunity for you to lock mortgage in San Antonio, Texas. So, check out the rates, as it is the best time for you to take an action. Like home itself, the right choice of choosing a mortgage depends on your needs and your current situation. And also it depends on how risk-averse you are and for how many years you are planning to stay in that home. So, if you are planning to buy a home in the U.S.A, using a mortgage it is important to consider whether to choose a Fixed or Adjustable Rate Mortgage.
Adjustable-Rate Mortgage (ARM)
Adjustable-rate mortgage (ARM) is typically a 30-years loan program, which means to need to pay- back the money you borrowed over 30 years of life span. Then interest rate of ARM, changes after the fixed period gets expired. At the initial stage of your loan, you will get a lower rate than average mortgage interest rates. These low rates will be there for around 7-10 years. And after the Fixed-rate mortgage period ends, the interest rate will adjust based on an Index.
A fixed-rate mortgage has the same rate of interest throughout the lifespan. Your monthly payment and interest rate don’t change. Your overall payments depend on your taxes and how homeowner insurance fluctuates.
A fixed-rate mortgage is popular financing as it is more predictable. You can opt for both a 15-year fixed-rate mortgage or a 30-year fixed-rate mortgage, which depends on how early you want to finish your mortgage loan.
Choose a right mortgage option
If as a borrower, you are risk-averse and look for simplicity, then you should opt for Fixed-Rate Mortgage. Perhaps, if you want to take more risk then choosing Adjustable-Rate Mortgage will work for you for a long period. Depending on your personal needs and goals, you should ideally choose your loan program. Not everyone is comfortable with taking a risk, consider an option that suits your lifestyle, and based on that consider the best mortgage broker in San Antonio Texas.
You need to ask yourself some of the questions, before deciding about which mortgage is the best for you.
“In today’s scenario, how large mortgage payment you can afford?”
“Would you will be able to afford ARM when it gets rises?”
“How many years you are planning to stay in that property?”
“ In what direction the trend of interest rate is moving? And would you like to participate?”
Ideally, if you are considering an Adjustable-rate mortgage, you should analyze the worst-case scenario. And if you think you still can afford the mortgage interest higher in the future, then ARM initially will save more money every month. You must use the saving as compared to Fixed-Rate Mortgage and make an extra monthly payment so that the total amount of the loan is smaller when the resets occur.
If you had made a plan, and want to consult the best San Antonio mortgage broker in Texas, then you must check out with the financial team of San Antonio Mortgage LLC and get the best guidance. Call us today!