The Pros and Cons of Fixed-Rate vs. Adjustable-Rate Mortgages

The Pros and Cons of Fixed-Rate vs. Adjustable-Rate Mortgages

Introduction

• Brief overview of mortgage types.
• Importance of choosing the right mortgage.

Fixed-Rate Mortgages

• Definition and key features.
• Advantages: Stability, predictable payments, good for long-term planning.
• Disadvantages: Higher initial rates, less flexibility.

Adjustable-Rate Mortgages (ARMs)

• Definition and how they work (introductory rate, adjustments).
• Advantages: Lower initial rates, potential for savings if rates stay low.
• Disadvantages: Uncertainty, risk of higher payments over time.

When to Choose Each Type

• Situations where fixed-rate mortgages are better.
• When ARMs might make more sense.

Conclusion

• Summarizing the importance of aligning the mortgage type with personal financial goals.