versus Adjustable rate.
Making Your Decision Take
a balanced approach.
The fixed rate/variable rate decision
is one of the first decisions you'll make in shopping for a loan. It's a balance
between looking at current interest rates and then answering the previous personal
questions. If you believe that interest rates are going to fall in the next few
years, or you plan to live in your home only for a few years, then an ARM might
be for you. If you're not willing to gamble on interest rates or think you might
stay put, pick a fixed-rate loan.
Remember the Bottom
Line Don't get side-tracked.
While your real estate
agent or loan officer is firing these ARM buzzwords at you, don't forget the bottom
line. Before falling in love with that temptingly low but temporary interest rate,
be sure to ask: What is the maximum rate I could pay?
Financing That is another option!
In some cases,
particularly if you need help getting financing or qualifying for a large enough
loan, the seller might be willing to assist you. Although it's not usually advertised-you
have to inquire with the seller or their agent-this unique type of financing can
be a great deal for both buyer and seller. It's definitely worth exploring with
your Realtor acting as facilitator. For example, if the seller has already paid
off their mortgage, he or she may be willing to hold the mortgage for you. Or
if you don't qualify to borrow quite enough to purchase the house, the seller
may be willing to contribute with a second mortgage that makes the purchase possible.
Start Your Engines!
Now that you've decided on the type
of loan you want, you can start shopping around.
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