Refinancing To A Fixed Rate Mortgage A Question Of Safety
There are many loan options open to those who want to refinance their current home loans. You may find yourself faced with the option of an ARM (adjustable rate mortgage) or a fixed rate loan. Which type you will choose depends on your personal sitation and the expectations you have for your refinanced mortgage.
A fixed interest rate mortgage is just what it sounds like. This type of home loan has a set, unchanging interest rate for the entire term of the loan. Should you refinance your loan over a term of thirty years, the interest rates will not fluctuate over that thirty years unless you once again refinance. Other fixed rate mortgages may run for only a set number of years (perhaps one to ten years). After this, they become adjustable rate mortgages.
A fixed rate mortgage differs from an ARM in that the adjustable rate mortgage has an interest rate which fluctuates, depending on the state of the current market and financial trends. This means that the monthly payments on an ARM loans are subject to change. When the prevailing interest rate increases, so does the monthly payment on...
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