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These loans generally begin with an interest rate that is 2-3 percent below a comparable fixed rate mortgage, and this could allow you to buy a more expensive home. However, the interest rates change at specified intervals depending on market condition changes;
- If interest rates go up, your monthly mortgage payment will go up.
- If rates go down, your mortgage payment will drop.
There are also mortgages that combine aspects of fixed and adjustable rate mortgages. Ask your mortgage professional about these and other special kinds of mortgages that fit your specific financial situation.
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