Buying a home for yourself isn’t only a matter of searching for the right property. You also need funding to make the purchase. Unless you have the flexibility to pay cash for a home outright, which is unlikely, you’ll need a home mortgage. When you go to apply for a mortgage, again, you have options. Some mortgages are fixed-rate loans, and some are adjustable-rate mortgages. Based on the names alone, you can already understand the key difference between the two mortgages, but in today’s blog, we explore the advantages and disadvantages supplied by both.
Fixed-Rate Mortgages Give You Something You Can Plan On
As you might guess based on the name, fixed-rate mortgages come with a fixed interest rate. That means that even as market conditions change, your monthly payment will stay the same. The major advantage that comes with this type of mortgage is that you can count on the monthly payment that you’ll need to make. That can be a big asset when it comes to creating your monthly budget. The drawback to this style of mortgage is that your interest rate will likely be higher, at least at the beginning of the loan term.
Adjustable-Rate Mortgages Can Be Unpredictable
Adjustable-rate mortgages are the opposite of their counterparts. An adjustable-rate mortgage will often come with a lower interest rate than a fixed-rate mortgage, but that rate isn’t guaranteed over time. An adjustable-rate mortgage rate can increase as the market changes, and you’ll have to bare the result of those changes. That means that your monthly payment could go up and price you out of your own home. While an ARM may seem more appealing because you can quality for a more expensive home, it comes with a significant risk as well.
Work with a Loan Officer That Knows Your Needs
For most people, an adjustable-rate mortgage probably isn’t a good idea. You don’t want to get caught up in a shifting market. A fixed-rate mortgage is a much safer bet, but everyone’s situation is different. You should work with a home loan officer that understands your personal financial situation and your home needs. This is the best way to make sure that you end up with a home mortgage that works for you. If you’re in need of a mortgage officer, your real estate agent may be able to help.
Bill Swanson Can Connect You to the Right People
Real estate agent Bill Swanson has been helping families buy and sell homes in the Omaha area for over 30 years. In that time, Bill has developed professional relationships with trustworthy home loan officers that he can connect you with during the homebuying process. Start working with Bill Swanson to buy a home by contacting his Omaha, NE office at 402-679-6566.
Buying or Selling a Home in Omaha? Call Bill Swanson Today!
As a long-time resident of Omaha, I know the area and the surrounding communities intimately, and can give you access to information that you could never find online. If you want to know more about the community, are looking to buy a home in a new one, or need the help of an agent to sell your home quickly, conveniently, and successfully, then email [email protected], or call (402) 679-6566.