Fixed Rate Mortgage vs Adjustable Rate Mortgage Calculator
When is a good time to consider an ARM?
When you DON’T qualify for the purchase of a home or refinance to a fixed rate mortgage. Sometimes this is the only way to qualify for a purchase due to credit history, debt to income ratio or not enough income. Anytime you begin to feel uncomfortable with the ARM loan and as long as you have equity you can refi to a fixed rate mortgage.
When your monthly payment, after the refinance, will be significantly less than the total of your current payment plus the payments of all your credit cards and loans. If you’re in a home for 5-7 years and you are paying 10, 15 or even 20% interest rate on consumer debts, refinance your mortgage and use your equity to pay off your high interest debts. This will make a significant impact on your monthly cash flow and may give you the necessary breathing room you need.
This Fixed Rate Mortgage vs Adjustable Rate Mortgage Calculator is not the only calculator we offer. MORE CALCULATORS
When you DON’T plan on staying in your home for more than 5-7 years due to family size increasing, kids going off to college, job relocation, etc. Why pay for a higher fixed rate long term mortgage if you are only going to move or refinance in a few years anyway.
Homeowners who refinance with long term fixed rates pay between 1.00-2.00% higher than those who refinance with an ARM. That may not seem like a lot but when you have a $250,000 mortgage, it makes a BIG difference in your payment.
When you CAN anticipate increases in your income due to promotions and raises. Some employees receive a raise each year based on a percentage of their current income and can come relatively close to determining what their raise will be. If you’re due for and expect to get a promotion, you’ll probably know ahead of time what that new position will pay you. These are perfect opportunities to consider a refinance.
When you ARE comfortable with moderate adjustments in your mortgage payment. Some people are just more relaxed about finances than others. Most often this is due to not having to worry about their basic survival needs and having a steady, generous income.
What it all boils down to is level of risk. If you can’t sleep at night unless you know your mortgage payment is $?????.00 every month, then a long term fixed rate mortgage is the best option for you.
If you can sleep at night taking some calculated risks, other options may be available to you.
Adjustable Rate Mortgages: This Home Mortgage Loan May Not Be For The Weak At Heart
If you have any questions resulting form using our Fixed Rate Mortgage vs Adjustable Rate Mortgage Calculator don’t hesitate to call.
Call us today at 424 225 2167 for more details. One of our mortgage professionals will help you get the best possible loan solution for your situation. We’ll be with you every step of the process and not hand you off to someone else.