Understanding Your Mortgage Options
When buying a home, one of the most important financial decisions you’ll make is choosing between a fixed-rate mortgage and an adjustable-rate mortgage (ARM). Each option has its advantages, and the right choice depends on your goals, budget, and how long you plan to stay in your home.
What Is a Fixed-Rate Mortgage?
A fixed-rate mortgage offers stability and predictability. The interest rate stays the same for the entire term of the loan — typically 15, 20, or 30 years — meaning your monthly principal and interest payments will never change.
Best For: Buyers who plan to stay in their homes long-term or prefer consistent payments.
Key Benefits:
- Predictable monthly payments
- Easier long-term budgeting
- Protection from future rate increases
Considerations:
- Higher initial interest rate than ARMs
- May pay more in interest if rates drop later
What Is an Adjustable-Rate Mortgage (ARM)?
An adjustable-rate mortgage begins with a lower introductory rate, which adjusts periodically based on market conditions. For example, a “5/1 ARM” means the rate is fixed for the first five years, then adjusts every year thereafter.
Best For: Buyers who plan to sell or refinance within a few years or those comfortable with potential rate changes.
Key Benefits:
- Lower initial monthly payments
- Potential savings if you move or refinance before the rate adjusts
Considerations:
- Rates and payments can increase over time
- Less predictable long-term budgeting
Choosing What’s Right for You
If stability and peace of mind are priorities, a fixed-rate mortgage may be your best option. If you’re looking for short-term affordability or plan to move soon, an ARM could help you save initially.
Final Thoughts
Understanding your mortgage type is essential to making a confident home purchase. At Boutique Realty, we work closely with trusted lenders to help you explore the best loan options for your situation — ensuring you make a well-informed choice that aligns with your financial goals.
📞 Contact Boutique Realty today at 818-312-0831 or visit allensellsla.com to get personalized guidance on your next home purchase.