Buying a home could be the biggest investment you will ever make, and there are many steps involved, including picking the right realtor. Our experts at Anchor Realty have the experience to walk you through the process of being a buyer in the market.
While there are many aspects to buying a home, one of the most important is understanding the different types of mortgages you could get and the advantages of each. There are typically two types of mortgages; a fixed mortgage and an ARM, or adjustable-rate mortgage.
The difference between a fixed mortgage and an ARM is the interest rate on a fixed mortgage doesn’t change unless you decide to refinance. Also, if you can snag a low rate, the security of not having your interest rate fluctuate can make it easier for you to budget. Fixed mortgages can also have a shorter loan term, like a 15-year loan, with a lower interest rate over time. But, while the interest remains fixed over the life of the loan, fixed mortgages generally have a higher interest rate than an ARM at any given time and there is the possibly of locking in a high interest rate in the beginning of your finance.
An adjustable-rate mortgage, also known as a variable-rate mortgage or a floating-rate mortgage, means the interest rate on the loan will fluctuate over time. Initially, the interest rate is lower than the rate on a fixed mortgage, but then starts to increase after a set amount of time. With an ARM, the interest rate you pay is determined by an index and a margin and changes based upon those two factors. When looking into an ARM, make sure you understand the maximum amount the monthly payment could increase after the initial set time period.
Although buying a home can be confusing, Anchor Realty has the experts you need to navigate through the market. From the time you meet with our real estate agents, to the time you step inside your new home, Anchor Realty will be buy your side every step of the way.
If you are ready to begin your journey into the real estate market, call us today and speak with our licensed real estate experts.