The search for the right house that’s within your price range can be a challenging and time-consuming endeavor. The manner in which you purchase a house could be equally, if not more, confusing. It might be easy to tell apart craftsman- and colonial-style homes from contemporary and neoclassical ones, but working out which mortgage rate in Phoenix suits your needs best requires a deeper understanding of the matter.
There are two main ways to finance your home purchase: fixed-rate mortgages and adjustable-rate mortgages.
Most homebuyers — usually first-timers — opt for fixed-rate mortgages. These involve paying off the loan with a specific interest rate that remains constant throughout the loan’s terms, typically over 10, 15, 20, or 30 years. Fluctuation in market rates may occur, but your interest rate stays the same. Homebuyers feel more secure with this mortgage rate option, especially when they intend to live in their house for an extended period.
Adjustable-rate mortgages (ARMs), meanwhile, are attractive due to the lower initial interest rate. They may retain this rate for months, but expect them to fluctuate with an indexed rate after the introductory period.
You don’t need to worry about sudden and huge monthly fluctuations, however, as there are calculated intervals where these adjustments happen, in addition to maximum and minimum caps to limit the adjustment size. The low initial interest rate of ARMs is ideal if you don’t plan on staying in your home for too long, or if you have refinancing plans in the future.
If you’re still on the fence about which mortgage rate in Tempe will be best for you, contact us at VIP Mortgage to receive expert advice today.