Top Reasons to Get a Variable Rate Mortgage
The interest rate that you pay on a home loan plays a significant role in determining your overall monthly payment. With a variable loan, you typically start with an interest rate lower than that of a fixed-rate loan. Let’s take a look at how this makes it easier to pay for your home.
Lower Rates Mean Lower Payments
A lower interest rate generally means that your monthly housing payment is lower as well. For those who have a limited income, this can make it easier to fit that payment into their budget. Making timely payments reduces the chances of being charged late fees or losing the home to foreclosure. Reducing your monthly payment can also be ideal for those who don’t want to live with a roommate. If rates continue to fall over the life of the loan, your loan’s rate will also fall with it.
Your Rate Stays the Same for Five Years
Most loans with variable rates keep the initial interest rate for a period of five years. In some cases, you get a rate lock that lasts for seven years. This gives you time to get a new job or otherwise stabilize your financial situation before applying for a traditional loan with a fixed interest rate. A variable rate loan can also be helpful for those who plan on selling their homes before the rate changes.
Variable Loans May Be Right for You
A loan with a variable rate may be ideal for someone who needs a lower payment to keep their debt-to-income ratio at a reasonable level. The best loan officers in Las Vegas may be able to show you loan products that meet your needs and budget. These loans can either be traditional mortgage products or those that are guaranteed by the federal government.