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| Clearwater Beach Real Estate Florida |
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financial section: mortgages |
Fixed-Rate Mortgages
Usually we have 30-year, 20-year, and 15-year, fixed-rate
loans. These loans usually come with no pre-payment penalty
and are an excellent choice when rates are low - like right
now!
Advantages: The rate will stay the same for the
life of the loan. If you can secure a fixed-rate loan when
interest rates are low, you'll be sitting pretty if and
when rates go back up.
Disadvantages: Interest rates and total interest
paid will be higher than with an adjustable-rate loan, and
you have less flexibility in the event that rates go down.
Adjustable-Rate Mortgages
We have 1-year fixed, 3-year fixed, 5-year fixed, and
7-year fixed adjustable mortgages. These loans are usually
lower than what you would obtain with a 30-year fixed-rate
loan. After the fixed period the loan becomes adjustable,
with a rate that reflects the rates available at that time.
Advantages: You may be able to get into a bigger, more
expensive home with lower initial monthly payments. If you
believe it is likely you will be selling before the end
of the fixed-rate period, this could be an excellent way
to minimize your monthly housing expenses and improve your
cash flow.
Disadvantages: With an adjustable-rate mortgage you will
have less stability in terms of interest rates and monthly
payments. If your risk-tolerance is low or you plan to stay
in the home for a significant period of time, this may not
be your best choice.
Interest-Only Mortgage Loans
These loans are fixed for a pre-determined term then become
adjustable, and have the lowest monthly payment of most
loan programs, as the monthly payment is only paying the
interest.
Advantages: Similar to a traditional ARM, you may be able
to get into a bigger, more expensive home with lower initial
monthly payments. This is a good way to go for the short-term
buyer, who will sell or refinance in a short period of time.
Disadvantages: The payments are only servicing the loan
interest, and therefore the mortgage will never be paid
down with this loan. |
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