Adjustable Versus Fixed Rate Mortgages

Stay away from adjustable rate mortgages unless you 1) have lots of money to spare so that it doesn’t get away from you; 2) have the ability to keep it from adjusting out of your range and into a major balloon payment at the wrong time; or 3) really have done a lot of research and gained the knowledge which gives you a heads up on the pros and cons, and a good feel/trust for the company you are dealing with.

For the most part and most regular families, the fixed rate mortgage is the way to go. Believe me I know what I am talking about. With a fixed mortgage your chances of allowing your property to gain equity are much greater, thereby affording you more opportunities if you should wind up needing cash quickly.

Don’t learn the hard way like I did. I have recently found that there are two types of Adjustable rate mortgages. One is actually truly called an adjustable rate, the other is an adjustable rate arm. I think “Arm” is the operative word here and what I wound up with by not having all of the pertinent information.

A representative from a bank that I was unfamiliar with offered me a great deal, 3% adjustable rate that I was to keep for six months and then rewrite back to a fix to keep the rate low. What I did not know during the negotiations was that they would sell the mortgage during that six month period, leaving me stuck with a mortgage gone out of control.

I read all of the fine print before signing. What I did not do was read it again and again and again whiles asking millions of questions. Then I would have known that this deal, no matter how good it sounded, was not for me.

This left me with a new mortgage company who claims that they are just the servicers of the loan and that the actual loan is really still with the previous company, and both unwilling to help me to get out of this trouble, no matter my struggle to pay on time, and no matter how bad my good credit rating might be completely ruined because of it.

If you are in a fixed mortgage and want better rates, you can get better rates, but don’t go adjustable unless you can absolutely afford to do so because you won’t have anyone to blame but yourself when everything goes awry.