If you're thinking about buying a home in Vero Beach, you probably already know that this community has tons of great places to watch the sun come up – but where are the best spots? This guide
What's the Difference Between a Fixed-Rate and an Adjustable-Rate Mortgage?
Dated: July 20 2022
If you're like many buyers, you know that you have a lot of mortgage options - but what's the difference between a fixed-rate and adjustable-rate mortgage? This guide explains.
A fixed-rate mortgage has an interest rate that stays the same for the entire life of the loan. This means that your monthly payments will stay the same, no matter what happens to interest rates in the broader market. The most popular type of fixed-rate mortgage is the 30-year mortgage, but you can also get 15-year and 20-year mortgages.
An adjustable-rate mortgage (ARM) has an interest rate that changes over time. The most common type of ARM is the 5/1 ARM, which has a fixed interest rate for the first five years, and then an adjustable interest rate for the remaining life of the loan. The main advantage of an ARM is that it usually starts off with a lower interest rate than a fixed-rate mortgage. This can save you money in the short term, but it's important to remember that your interest rate - and therefore your monthly payments - could go up in the future. So, which type of mortgage is right for you? The answer depends on a few factors, including your financial goals and your tolerance for risk. If you're planning on staying in your home for a long time, a fixed-rate mortgage may be the better choice. On the other hand, if you're comfortable with the possibility of higher interest rates down the road, an ARM could save you money in the short term. Ultimately, the best way to decide is to speak with a mortgage lender and compare your options.
What Type of Mortgage is the Most Common?
The most common type of mortgage is the 30-year fixed-rate mortgage. According to the Mortgage Bankers Association, this type of loan made up 73.8% of all mortgages in Q4 2018. The next most popular types of mortgages are the 15-year fixed-rate mortgage (9%), the 5/1 ARM (8.9%), and the 20-year fixed-rate mortgage (4.3%).
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It was bound to happen the day Alex MacWilliam, IV was born…the Alex MacWilliam Real Estate family legacy would carry on. Fast forward to September 2013, when Alex IV joined the firm, and the famil....
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