One Year Adjustable Mortgages
There are many different types of mortgages available to the potential homeowner. It can be difficult to know the different types of mortgages let alone which type is best for you. A one year adjustable mortgage may be the right choice for you.
A one year adjustable mortgage is a mortgage loan where the interest rate changes based on a specific time period that is decided upon at the beginning of the loan. This is considered one of the riskier mortgages available. This is because the rate can not only change but change significantly.
It is not all bad with a one year fixed mortgage though. In exchange for the risk, the homeowner is rewarding with a lower interest rate than they would have if they were to get a thirty year mortgage.
A one year adjustable mortgage can be a bit confusing for some. What it is, is a thirty year fixed mortgage where the interest rate changes every year on the anniversary of the loan. It can be a gamble though. With a one year adjustable mortgage you do not know what the rate will be next year. It can go up and it can go down. One thing to keep in mind is that if it is not a rate that you like you only have it for a year, not thirty.
Another benefit of getting a one year adjustable mortgage is that often those who do qualify for a larger loan. This means that they can get a more expensive home, or have more money to fix up a cheaper home, or maybe even build your dream home. The options are endless and if you are able to get more money than you can do more with it.
Those who have extremely large mortgages have the ability to get a one year adjustable mortgage and then refinance every year. This can help to lower your payments every month. It can also help you to save more money on the interest and the loan itself.
This one year adjustable mortgage is a good idea for many people. There are a lot of people scared off by this type of mortgage though, simply because it is a bit riskier because you do not know what your mortgage rate will be from year to year. Most people who get a one year adjustable mortgage tend to have lower monthly payments than those who get a fixed rate mortgage.
There are pros and cons to any type of mortgage that you get. You need to do your homework before deciding on a mortgage. You may find that you can get a better rate somewhere other than where you normally bank at. Look around at different banks and ask a lot of questions. Do what is best for you.