Adjustable Rate mortgages vs fixed rate mortgages? Is this correct?
by Mortgage Rates on Wednesday, October 13th, 2010 | 7 Comments
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That is correct.
right an ARM (Adjustable Rate mortgages) moves with the market up or down, but caps off at about double.
Right. And adjustable has the capacity to thoroughly screw up your whole day. Stick to fixed.
You would be correct to assume an adjustable rate mortgage can double.
A fixed mortgage stays at that percentage for the life of the loan but monthly house payments can still increase due to other factors, mainly taxes.
I don’t know anybody who signs up for ARM loan, that’s just asking to get shafted.
Yes, basically.
FYI: The terms of the note will let you know the maximum the rate can increase on a variable rate (adjustable) mortgage. They all have caps, but some are so high the rate could double.
They could more than double, but can go down also. Probably not a current rates. It depends on what they use as their benchmark. Some ARMs use Treasury note rates or the cost of funds index. There are graduated rates that go up at a scheduled, contracted rate. Fixed rates stay constant.
Yes you are correct. Fixed rates are very low right now..I would definitely go that route!! Rates will be going up on adjustables for sure.