Trying to find the perfect mortgage option can be hard for any first-time home buyer because of the countless loan types available on the market. This is why working with a mortgage lender in Bellevue is so beneficial. Your local lender will assist you throughout the application process and will help you decide which loan is the best option for your financial situation.
So, to help you get started, the Nicole Vaivadas Team with Primary Residential Mortgage, Inc. has listed the main differences between two of the most popular loan types, fixed and variable rate mortgages.
A fixed-rate mortgage is where you are given a price on your loan that does not change throughout your amortization period. If you are typically not the risky type, then this mortgage may be the best option for you. With a fixed-rate mortgage, you never have to worry about the rates fluctuating, which means it is easy for you to budget your finances accurately. With this peace of mind, however, you will generally be offered a higher interest rate than if you were to obtain a different type of mortgage.
Variable Rate Mortgage
A variable rate mortgage also referred to as an adjustable rate mortgage (ARM) is a loan whose rates are dependent on the market. Now, we all know that the rates on a mortgage in Bellevue are constantly changing, which is why this loan is geared more towards the risky borrowers. An ARM typically has lower initial interest rates than a fixed-rate mortgage, which is why this is a more popular choice among first-time buyers. The downside to an ARM, however, is that your rates could change overnight with little to no warning. If the market changes and interest rates increase, you could be spending more towards your mortgage than you originally hoped. Although, if the opposite were to occur, you would reap the benefits of paying less on your mortgage than what you expected.
To figure out which mortgage option is best for you, please contact your local mortgage lenders in Bellevue, the Nicole Vaivadas Team, at 425-818-5880.