Brian Barker discusses the differences between adjustable loan rates vs. fixed loan rates.
Listen to the interview on the Business Innovators Radio Network:
Adjustable rate loans often have lower initial interest rates, making them attractive to borrowers. However, adjustable rate mortgages (ARMs) may come with a risk—the interest rate on the loan can change over time. This means that monthly payments can fluctuate. If people cannot keep up with the higher payments when the interest rises, they may be in financial trouble.
On the other hand, fixed-rate mortgages offer more stability as they remain unchanged throughout the life of the loan and don’t fluctuate as an ARM does. With a fixed-rate mortgage, what people pay each month remains consistent regardless of market conditions or economic changes. However, they will usually pay higher initial interest rates for this security.
Brian Barker explained: “Ultimately, the decision of whether to go with a fixed-rate or adjustable-rate loan comes down to your personal financial situation and goals. If you can afford higher payments in case of interest rate fluctuations, an ARM may be the right option for you. If you prefer consistent payments over time no matter what happens in the economy, then a fixed-rate mortgage may be the better choice. It’s important to research both options thoroughly and speak with a loan professional before making any decisions when considering a loan product.”
Understanding adjustable loan rates vs. fixed loan rates can help make a more informed decision and save money in the long run.Video Link: https://www.youtube.com/embed/vpEH3Ph6lFM
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