What is the difference between a fixed-rate and adjustable-rate mortgage at Allied Home Mortgage Corp.?

A fixed-rate mortgage and an adjustable-rate mortgage are two different types of loan products that can be offered by Allied Home Mortgage Corp. In a fixed-rate mortgage, the interest rate remains constant throughout the life of the loan. This means that the borrower’s monthly payments will not change, providing stability and predictability in budgeting. This type of mortgage is often preferred by individuals who value certainty and plan to stay in their homes for the long term, as it protects them from fluctuations in interest rates. On the other hand, an adjustable-rate mortgage, often referred to as an ARM, features an interest rate that can change over time, usually in accordance with a specific index. Initially, ARMs typically offer lower interest rates compared to fixed-rate mortgages, which can result in lower initial monthly payments. However, after an initial fixed period, the interest rate may periodically adjust, which can increase or decrease the borrower’s monthly payment depending on market conditions. This type of mortgage may appeal to those who anticipate selling or refinancing before the initial fixed rate period ends, but it introduces more risk in terms of potential payment increases. Individuals interested in learning more about these mortgage options, including specific terms and conditions, may want to refer to the Allied Home Mortgage Corp. website for further information.