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FIXED MORTGAGES VS ADJUSTABLE RATE MORTGAGES

There are various types of mortgages available in the market, and the more you know about them the better are the chances to choose the right one.<br>https://www.spencersavings.com/loans/mortgages/investment-property-mortgages/

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FIXED MORTGAGES VS ADJUSTABLE RATE MORTGAGES

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  1. FIXED MORTGAGES VS ADJUSTABLE RATE MORTGAGES

  2. Mortgages • There are various types of mortgages available in the market, and the more you know about them the better are the chances to choose the right one. • To compare fixed rate mortgage with another mortgage type or with adjustable rate mortgages, you need to consider about the caps, margins, discounts, positive & negative amortization and convertibility. • Most importantly, you need to know your monthly payments for the home loan that you select.

  3. Types of Mortgages • Fixed Rate Mortgages • Adjustable Rate Mortgages

  4. Fixed Rate Mortgages • In a fixed rate mortgage, your interest rate remains same for the entire term of the mortgage. • The main advantage of a fixed rate mortgage is that you always know your exact payment value of your home loan as it allows you to manage your monthly budgets.

  5. Advantages of Fixed Rate Mortgages: Disadvantages of Fixed Rate Mortgages: • Low – Very low interest rates for the entire term of your home loan • Steady – Default interest rates; there is no need to fear for fluctuations in the interest rate. • Peace of Mind – More stability in interest rates may give you peace-of-mind with repayments. • The initial payment for fixed rate mortgage is much higher when compared to adjustable rate mortgages. • Very less flexibility when compared to all other available types of mortgages.

  6. Adjustable Rate Mortgages (ARM): • Usually, the adjustable rate mortgage starts with very low interest rates and monthly payments when compared to fixed rate mortgage. • After the certain time period, the repayment value may move up or down for once or twice in a year. • Basically, the rate of adjustment for ARM will vary based on your contract.

  7. Advantages of Adjustable Rate Mortgages: Disadvantages of Adjustable Rate Mortgages: • Lower initial payments due to the lower beginning rate of Interest. • Having lot of chances to qualify for a higher loan amount due to lower initial interest rates. • It is difficult to predict your future monthly payment. • If your interest rate rises,your monthly payment will automatically get increased.

  8. Conclusion • The main advantage of an adjustable rate mortgage is that, it allows you to buy a more expensive home because your initial rate and the payment will be lower. • A fixed rate allows you know the exact payment value for your home loan as the rate of interest for fixed rate mortgage will remains same during the entire term. • Usually, a fixed rate mortgage is an ideal option for every buyer who wishes to manage monthly expenses or budgets.

  9. ABOUT US Spencer Savings Bank is a full service, mutually owned and operated, community bank operating 21 branches across New Jersey. We’ve been in business for over 100 years, have more than $2.7 billion in assets and a team of nearly 300 dedicated employees who specialize in delivering premier banking products and services. Spencer prides itself on being one of New Jersey’s strongest community banks – maintaining its distinct image of trust, security and commitment to its customers throughout all these years. We meet the full range of individual, business, commercial, and municipal banking needs through our broad menu of banking products and services. From basic personal checking services and small business products to financing expertise on multi-million dollar properties and commercial enterprises, Spencer’s banking capabilities are on par with those of the larger regional and national banks. Our highly experienced management team provides a unique and personal approach to banking locally, servicing its customers with an exceptional level of care that can rarely be found at larger banks. At Spencer, we understand the importance of getting to know you as a customer. Not only will you have access to our broad menu of banking capabilities, you’ll also receive the personal attention you deserve as a valued customer. By taking the time to understand your needs, we become partners in the success of your business and personal financial goals. We’re also proud to partner with our neighbors to improve the quality of life for our community. With our roots as a community bank, we proudly support local business and workforce initiatives in the areas we serve, in addition to numerous civic groups, charitable organizations and youth educational programs.

  10. CONTACT US • Mailing Address - 611 River Drive Elmwood Park, NJ 07407 • Customer Service - 1-800-363-8115 • Email ID - personalaccounts@spencersavings.com

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