Once you have decided to get a mortgage, you will come to the point where you will need to decide if an adjustable rate mortgage (ARM) or a fixed rate mortgage is right for you. Since both of these primary mortgages have benefits, how is it possible to chose which is best for you? See below for basic definitions of each and get a better understanding of how they can possibly benefit your current financial situation.

Adjustable rate mortgages (ARMs)

ARMs are mortgages that have the ability to alter your rate. However, a benefit of this mortgage is that it usually starts you out with a lower rate than it would if you got a fixed rate. This lower rate does not stay forever, but it could stay for months or years. In short, an ARM is less popular than a fixed rate mortgage because of the uncertainty.

Fixed rate mortgages

These types of mortgages are pretty simple to understand just by looking at the name. If you obtain a fixed rate, your rate will not change for a certain amount of time. Whether you get a 15 or 30 year, you will not have to worry about your rate changing. There is much certainty in fixed rate mortgages. However, whenever rates rise, it becomes more difficult to qualify for a loan.

If you are still undecided after doing some research, your loan officer will be able to give you more specific details based on your loan amount, property value, etc. Be sure to communicate the amount of years you intend to live in your home, and ask in-depth questions about where the mortgage market is heading.