Most homeowners take out fixed-rate mortgages because they have predictable monthly payments.
An adjustable-rate mortgage has a low introductory interest rate for several years.
After the initial period, the rate resets periodically. A homeowner’s interest rate and monthly payments can rise or fall.
A fixed-rate mortgage can provide peace of mind, but it’s not always the best option.
You might prefer an ARM if you expect interest rates to go down or if you plan to sell the house before the rate resets.
If you will stay in your new home long-term, you can take out an ARM and plan to refinance later. That can be risky. You don’t know if interest rates will go up or down. If you’re not in good financial shape, you might be unable to refinance at all.
Consider your goals and compare quotes from several lenders.
