Fixed-Rate vs. Adjustable-Rate Mortgages (ARMs)
Fixed-Rate Mortgages
- The interest rate remains constant for the life of the loan.
- Ideal for borrowers who prefer predictable monthly payments.
Adjustable-Rate Mortgages (ARMs)
- Start with a lower initial interest rate that adjusts periodically based on market conditions.
Key Considerations:
- Know the frequency and limits of rate adjustments.
- Understand how high or low the rate and payment can go.
- Evaluate affordability at maximum interest rate caps.