When Is an Adjustable Rate Home Loan Your Best Choice?

Adjustable rate home loans are the best financing strategy for you, if:

1. you plan to live in your new home for 5 years, or less;

2. the lower adjustable rate makes the difference between you owning your home or missing the opportunity of home ownership;

3. you are a savvy real estate investor that understands the financial and real estate markets and knows how to effectively leverage real estate.

The Adjustable Rate Loan has a fixed interest rate for a period of time; it may be as short as 1 month and as long as 10 years.  There are numerous “fixed period” options to choose from. After the “fixed period”, the interest rate adjusts based on a selected index or value (for example, the rate of the 30 Year U.S. Treasury Bond).

This is a moderate financial tool that can be used very effectively to buy a house that you might not have been able to afford with a fixed rate loan since adjustable rate loans have a starting rate that is much lower than comparable fixed rate loans.

Over the past decade, adjustable rate mortgages have outperformed fixed rates, i.e., they have resulted in lower interest rates being paid over the life of the loan.  They are a very effective cash flow and real estate equity building tool.

There are hundreds of adjustable loan programs available to you.  The most effective way for you to compare your options is to have a Charles Rutenberg Financial mortgage expert calculate a FREE “loan comparison” matrix for you.  Then, you will have all the information you need to make an informed decision.  Call us now at 1.877.Rutenberg (788-3623).