Fluctuations in the housing market sometimes make adjustable rate mortgages are good option for borrowers. By choosing an adjustable rate loan, you may be able to save a significant amount of money over the life of the loan. Adjustable rate loans come with risk, though and are not a good choice for some borrowers, no matter how low the initial rate goes.
If you are on a fixed income or do not expect your income to increase substantially in the next few years, you are a good candidate for a fixed rate mortgage in Allentown PA. A fixed rate ensures that your mortgage payment is predictable as long as you have your loan. While adjustable rate mortgages have attractive low rates in the initial years of the loan, they fluctuate based on market conditions after the first one, three or five years.
You may be a good candidate for a fixed rate mortgage if you live paycheck to paycheck with little cash in the bank to handle the potential increases in payments that are common with adjustable rate mortgages. Home buyers with good jobs but without the financial management or budgeting skills to put money away every month should steer clear of adjustable rate loans.
Home buyers with excellent credit scores are great candidates for fixed rate mortgages. With an excellent credit score, you can qualify for the best rates which may make the difference between initial rates on adjustable rate mortgages and your rate on a Fixed Rate Mortgage in Allentown, PA negligible. It often pays to take steps to increase your credit score prior to buying a home because the higher your score, the more favorable a rate you will be offered by lenders.
There is no question that the low introductory rates of adjustable rate mortgages are attractive. However, they are just not right for everyone. If your personal and financial situation make you a good candidate for a fixed rate mortgage, you may be happier and have less stress with a fixed rate loan. Talk to your broker about how a fixed rate mortgage can benefit your family.Click here to know more about Sky Financial Services
