As you are going through the homebuying process for the first time, there will be a lot of different options available for you. A lot of the time, people find themselves having to decide between a fixed-rate and an adjustable-rate mortgage. 

A Fixed-Rate Mortgage is a fully amortizing mortgage loan where the interest rate on the note remains the same throughout the term of the loan. 

An Adjustable Rate Mortgage is a loan with an interest rate that can change periodically.

When interest rates are historically low, a fixed-rate mortgage makes good financial sense. A majority of mortgages originated are fixed-rate Only about 3% of buyers are choosing adjustable-rate loans today.

While a fixed-rate mortgage is the best choice for the majority of homebuyers, there are some circumstances where an adjustable-rate mortgage may be better. For example, if you expect to sell the house before the fixed-interest period ends and the rate starts to float, an ARM could end up saving you thousands of dollars. Or, during periods of falling interest rates, an ARM can allow you to get a low initial rate, and will save you money later if rates drop further.

If you are trying to decide between a fixed-rate and an adjustable-rate mortgage, please reach out!