For homebuyers1 min read
Fixed vs. adjustable-rate mortgages
The difference between a rate that never moves and one that's fixed for a while, and how to think about which fits your plans.
A fixed rate
With a fixed-rate mortgage, your interest rate, and the principal-and-interest part of your payment, stays the same for the life of the loan. It's predictable, which is why most buyers choose it.
An adjustable rate
An adjustable-rate mortgage (ARM) is fixed for an initial period, often five, seven, or ten years, then adjusts on a set schedule based on the market. The starting rate is often lower than a comparable fixed rate, in exchange for that later uncertainty.
How to choose
It usually comes down to how long you expect to keep the loan. If you plan to stay put for decades, the certainty of a fixed rate is hard to beat. If you have a clear reason to expect a shorter hold, an ARM can make sense. Your loan officer can compare both for your situation.
Questions about your own file?
A loan officer licensed in your state can run your actual numbers.
Keep reading
For homebuyers1 min read
Preparing for pre-approval
What a loan officer looks at, the documents worth gathering early, and how pre-approval differs from pre-qualification.
For homebuyers1 min read
How your credit affects your loan
What lenders look at beyond the score, how credit shapes your options, and the moves to avoid once you're shopping.
For homebuyers1 min read
How much down payment you need
The 20% figure is a myth for most buyers. Here's what the low-down-payment programs allow and the trade-offs to weigh.
This guide is general information, not financial advice, a quote, or loan terms. Program availability and qualification vary. ALCOVA Mortgage LLC, NMLS #40508 (www.nmlsconsumeraccess.org). Equal Housing Lender.