Fixed rate or variable, which is right for you
This is primarily assuming that you are considering purchasing a home in Weston. There was a time when I would have suggested fixed rate mortgages without exception. My opinion, however, has shifted slightly and for good reason. Some lending institutions are now offering adjustable rate mortgages where the low rate remains low for a much longer time than they did 4 or 5 years ago.
An example of this is my good friend, Marty. Marty just got a 30 year adjustable rate mortgage with a well recognized lender. The first 10 years of the loan are at 2%. You heard me right 2%. And no, this is a negative amortization mortgage where there is unpaid interest every month that is added to the loan amount.
The 2nd 10 years of the mortgage the rate goes to 2 ¾ % and the last 10 years are at 4%. This is a wonderful loan in my opinion. Current average 30 year fixed rate for mortgages are at 4.22%. So today if it were me, I would have to take the adjustable one if I qualified. This is why we so strongly recommend using our mortgage broker who can shop for you to make sure that you are in fact reviewing all of your financing options. Every family’s credit is different and when you are shopping for a loan that for a large amount like a mortgage it pays to not make any mistakes.
The other germane fact is that statistically Americans move every 5 years.
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