Tim Kerr's Powerplay RealtyServing Avalon and Stone Harbor NJ - (609) 967-7950

Calculate & Compare Fixed and Adjustable Rate Interest-Only Mortgages

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Why Fixed Mortgage?

The Fixed Rate Mortgage offers the certainty of a constant monthly payment.  With this type of mortgage your principal payment, interest payment, and an interest rate will all remain the same for the entire length of the loan.  A Fixed Rate Mortgage is pegged to long term bonds.  Its' safety and reliability will often times give the homeowner peace of mind.  This is the more straight forward of the two and people, as expected, embrace the 30 year Fixed Rate Mortgage rather than an ARM because of the warm and fuzzy sense of safety that a fixed exudes.  In our market Fixed Rate Mortgages generally offer the following time periods: fifteen years and thrity years.

Why Adjustable Rate Mortgage?

Lenders are often quoted saying "Why get a 30 year mortgage if you won’t be in the home that long?"  This is basis of the Interest-Only Adjustable Mortgage.  An ARM usually has an interest rate and a monthly payment that are fixed only for a specific period of time.  When the time of the loan comes due both rate and payment will adjust.  Its' rate is based on the short term bond market.  With an ARM you can take advantage of the lower rate and monthly payment, hence its' appeal.  The possibility of an even lower rate and payment down the road when the rate is adjusted may tempt you even further.  This also comes with the fear of a higher adjustment as well.  In our market ARMs generally offer the following initial fixed time periods: three years, five years, seven years and ten years.

Synopsis:

The choice is yours to make. There is no right or wrong answer, each situation differs.  Making an informed decision that is right for your situation will include speaking to a mortgage professional and going over the options that will best suit your needs on each particular purchase.

 

 

Contact us at 609.967.7950 or info@powerplayrealty.com Tim Kerr's Power Play Realty for Mortgage Rates