Buying a house is a huge financial commitment, and choosing the right type of loan can be a confusing process. VIP Mortgage is here to help you explore different loan types and mortgage rates in Phoenix, and find the one that fits your needs before you get too far in the process.
Generally, mortgage rates in Phoenix come in two forms: fixed or adjustable rate.
Fixed mortgages involve a consistent interest rate that you need to pay all throughout the life of the loan. The principal and the interest remains constant over the term, but property taxes, insurance, and other costs may fluctuate.
Because the rates are constant, there will be no surprises even if the rate or inflation increases. This allows you to manage your money with more certainty.
The interest rate for an adjustable-rate mortgage (ARM) varies over time. It often starts at a lower interest rate, which increases as time goes on. This initial rate may stay the same for months during the introductory period, and after this period, the rates will change and the amount of payment will likely go up.
This may not sound appealing, but you can use the lower payment to buy bigger homes than you could otherwise afford. It also allows you to take advantage of decreasing rates without refinancing, which often involves paying closing costs and fees all over again.
Still confused about which loan type to choose? Do you want to know whether a fixed-rate mortgage best suits your lifestyle and financial situation? Contact Primary Residential Mortgage, Inc. today and we will help you decide what best fits your needs.