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One of the most important decisions potential home buyers make when purchasing a home is whether to choose a fixed mortgage, or opt for a variable mortgage.
What does this really mean?
These terms refer to the interest rate on the mortgage loan.
Fixed mortgages have an interest rate that’s set in the beginning. The rate doesn’t change throughout the life of the loan. Home owners choose this type of mortgage when mortgage rates are low, so they can lock it in. A fixed rate also assists in easier budgeting, because the monthly payment stays the same. Another reason to opt for a fixed mortgage is if the purchaser will be living in Doylestown for several years and not moving from the home.
Variable mortgages, also called adjustable rate mortgages, begin with one interest rate that may change over time as the market shifts. These mortgages often offer lower interest rates in the beginning than fixed rate mortgages, which attracts home buyers who want a bigger home than they can afford with a fixed mortgage. Buyers who are moving up in their jobs and are confident they will be able to afford the monthly payment if the rate increases might also think an variable mortgage is attractive. If interest rates are high, a variable mortgage can get home buyers into a house for the short term, and then hopefully the rates will go down and they can refinance.
Looking for a home mortgage in Doylestown requires thinking about the type of mortgage that is best for each individual buyer. While fixed mortgages are typically viewed as a “safer” choice, variable mortgages are also smart options in certain situations. The decision, in the end, is up to each buyer and their personal preferences and needs.