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Adjustable Rate Mortgages
One of the biggest mortgage-related decisions you’ll make is what type
of mortgage to buy. There’s fixed rate
or adjustable rate types. Banks and savings and loan companies don’t normally
promote ARM’s or adjustable rate mortgages because banking
institutions prefer mortage buyers just settled in on a long term rate on
a 30 year mortgage and make the monthly mortgage
payments. Good for the bank or S&L, but perhaps not so good for you.
Adjustable rate mortgages rarely rise out of control especially with the government
keeping such a tight rein on the economy. We’re in the midst of strong economic
expansion, and although there might be a few blips on the trip, the journey ahead
is pretty certain. Interest rates will stay low and in fact they’re shown
a downward trend recently. Within this reasonably safe scenario, you have the
option to try adjustable rate mortgages with the benefits they have to offer.
Lower interest rates is the biggest advantage of adjustable rate mortgages.
Fixed rate mortgages, whether 15 year
fixed rate mortgages or 30 year fixed rate mortgages leave you paying more over
the long term. When you consider the cost of $200,000 dollar to $500,000 home,
the money leaking out of your financial portfolio is significant. It’s odd
that investors would never tolerate a low return on their financial investments,
yet many home mortgage buyers accept
a 30 money losing mortgage with their bank. Banks play up the security element
of a mortgage as though it was the core feature of a mortgage. It’s something
they can use to brand their dominance in the mortgage market. That brand image
of safe and secure belies the truth that they’re taking too much money away
from you the mortgage buyer. And, it is considered a debt not an investment.
When a mortgage is thought of properly as a financial
investment, an adjustable rate
becomes a key tool in improving return on investment. Short term interest rates
are almost always lower given the lesser risk of short term loans. Managing short
term interest rate mortgages may involve more work for some, but given the amount
of money involved in home purchases, it is often a wise move to reduce interest
rates as low as possible.
If you’re in need of some short term relief from high mortgage payments,
then an adjustable rate home loan may be the solution. Ask a representative from
GNA Mortgage Group for more information on adjustable rate mortgages in Massachusetts
or New Hampshire.
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