First time home buyers can be excited and overwhelmed at the same time. Nova Home Loans understands they need some help sorting through the bigger issues like whether a fixed rate mortgage or adjustable rate mortgage (ARM) is the better mortgage product for them. Here are a few ideas to steer you toward the right decision.
Talking to Mortgage Lenders in Phoenix AZ
Don’t be afraid to ask the right questions about the adjustable rate mortgage. They might look more attractive because today’s low rates means you can pay your loan down quicker, but those same rates go up eventually and a smaller chunk of your monthly payment goes toward the principal or amount outstanding. Do some math and figure out how much a rise in interest rates will affect your monthly payments. Remember a new house means other new payments like utilities and property taxes need to be considered as well. A fixed mortgage rate makes it easier to calculate this new budget since the payments don’t change over the term.
Deciding on Your Arizona Home Mortgage
If you decide on the adjustable rate mortgage, don’t make the mistake of thinking you can sell your home quickly if the rates go up. Looking at the fixed mortgage rate makes more sense if a rate increase challenges your budget.