Improving My Financial Situation

About Me

Improving My Financial Situation

After struggling with money for years, I finally made the decision to start focusing on my finances. Instead of buying whatever I wanted and hoping for the best when my rent came due, I started carefully calculating my expenses and budgeting my money carefully. It took a lot of practice, but after a few months, I could tell that it was making a significant difference. I started noticing that I had more money in my pocket and that I was less stressed about the hassles involved with fulfilling my financial obligations. This blog is all about improving your financial situation.

Latest Posts

Simple Ways to Organize Your Checking Account: A Guide
16 October 2023

Checking accounts are a crucial part of financial

Being Prepared For The Bail Bonding Process
14 June 2023

The bail bonding process can be a complex and inti

Should You Get An Adjustable Rate Mortgage?
7 March 2023

If you are in the process of purchasing a home, yo

Starting A Side Hustle? 5 Steps To Manage Your Bank Account
5 December 2022

Are you starting a side hustle? Whether you're exp

5 Ways A Wealth Manager Helps You During High Inflation
27 June 2022

Do you worry about the rising tide of inflation? A

Should You Get An Adjustable Rate Mortgage?

If you are in the process of purchasing a home, you may be wondering what type of mortgage you should get. While people typically get a fixed-rate 15 or 30-year mortgage, you also have the option to get an adjustable-rate mortgage. Here is what you need to know about the advantages and disadvantages of this type of loan. 

Adjustable-Rate Mortgage Advantages

A huge benefit of getting an adjustable-rate mortgage is that there is an introductory period where there is a fixed interest rate. While the loan's interest rate will eventually change, you know that for the first few years, you'll have a low rate that is locked in. This can be a great way to save money in the short term if it works for you, such as if you plan on selling your home within the fixed rate period.

There are also many types of adjustable-rate mortgages with different introductory periods. For example, it is possible to get an adjustable-rate mortgage where you only pay interest during the introductory period. This gives you the ability to have a really low monthly payment that you wouldn't have with other loans. 

While interest rates can go up when the adjustable-rate period begins, it is also possible for rates to go down. This will feel like a bit of a gamble, but you could end up getting a better deal on your mortgage by waiting for a positive change in interest rates. 

Adjustable-Rate Mortgage Disadvantages 

There is a bit of uncertainty when you get an adjustable-rate mortgage. If you are a risk-averse type of person, you may not like your future mortgage payment being a bit unknown at the time you lock in your mortgage. If you are on a strict monthly budget, then an adjustable-rate mortgage will not work for you.

An adjustable-rate mortgage can also be quite confusing when compared to other mortgages. While a fixed-rate mortgage has a single payment that you make for the duration of the loan, an adjustable rate has many rules that play into how much you pay. 

For example, your interest rate is tied to an index, which you may not fully understand how it works. There are also caps on how much your interest rate can change per adjustment period. Some adjustable-rate mortgages also have a conversion option, which allows you to turn it into a fixed-rate mortgage without having to refinance.  

For more info about mortgages, contact a local lender.