'Adjustable Mortgages, Satan or Salvation?'

Adjustable Mortgages, Satan or Salvation?

By Brian White at 05/28/07 09:34

If you're an emerging renter showing your face for the first time into the home-buyer market, your mortgage dude is likely to be pushing you to the glorious promises of an adjustable rate mortgage over that of the more traditional fixed rate variety.

Which is right? One says the arm holds the power and the "fist" is bent, but both have their benefits.

If you can afford a fixed rate mortgage, and find the terms attractive, the conservative mind always says that it's the most beneficial. Fixed is a guaranteed rate, but guaranteed "high" rates. Adjustable says that you'll pay a guaranteed rate high enough to sufficiently line the coffers of those more fearful of rate fluctuation than you. Still, it's affordable and good, don't poo-pooh it unless you have some other inside information.

The adjustable rate mortgages can expand your buying power from $300,000 to $400,000 or more, and likewise along proportionate lines. The difference to you can be a bigger kitchen, an extra bedroom or bathroom, or a quiet, fenced yard, instead of the absence.

We'll talk more about this in coming weeks, so check back frequently for more information and don't be afraid to ask us specific questions.

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