There's a need to know before getting into Adjustable Rate Mortgage. you have to know what you are getting into. There are different type of Adjustable Rate Mortgage in the market today and this is based on my basic knowledge of ARMs. This is not a professional advice at all. Before financing your home, make sure you have research all possibilities and make the right decision for you.
you may choose to get a loan with one year ARMs, what this means basically is that interest rate is adjustable yearly. Hybrid ARM tell one that there will be a period of either 3, 5, 7, 10 years where their interest rate remains constant and then adjust every year or every 5 year etc., depending on the ARM of your choice. No matter your choice, beware of the sticker shock or negative amortization. The negative amortization could actually grow the principal balance of your mortgage. Thankfully, though, some of this ARM with negative amortization has disappear because of recent real estate bubble
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