Some borrowers are struggling to make
monthly mortgage payments due to a
drop in income, job layoff, illness or some other factor beyond their control.
Team CF Top Tip (with a hat tip to one of our readers), if you have been living
in the same house for a few years, doing a new price evaluation may help you lower your interest costs /
monthly payment as, due to the price increase the newly calculated
mortgage ratio may
drop you into a lower interest rate class.
FRM pros and cons: + Peace of mind that your interest rate stays locked
in over the life of the loan +
Monthly mortgage payments remain the same - If rates fall, you'll be stuck with your original APR unless you refinance your loan - Fixed rates tend to be higher than adjustable rates for the convenience of having an APR that won't change ARM pros and cons: + APRs on many ARMs may be lower compared to fixed - rate home loans, at least at first + A wide variety of adjustable rate loans are available — for instance, a 3/1 ARM has a fixed rate for the first 36 months, adjustable thereafter; a 5/1 ARM, fixed for 60 months, adjustable afterwards; a 7/1 ARM, fixed for 84 months, adjustable after - While your interest rate could drop depending on interest rate conditions, it could rise, too, making monthly loan payments more expensive than hoped How is your APR dete
Monthly mortgage payments remain the same - If rates fall, you'll be stuck with your original APR unless you refinance your loan - Fixed rates tend to be higher than adjustable rates for the convenience of having an APR that won't change ARM pros and cons: + APRs on many ARMs may be lower compared to fixed - rate home loans, at least at first + A wide variety of adjustable rate loans are available — for instance, a 3/1 ARM has a fixed rate for the first 36 months, adjustable thereafter; a 5/1 ARM, fixed for 60 months, adjustable afterwards; a 7/1 ARM, fixed for 84 months, adjustable after - While your interest rate could
drop depending on interest rate conditions, it could rise, too, making
monthly loan payments more expensive than hoped How is your APR dete
monthly loan
payments more expensive than hoped How is your APR determined?