Fixed Rate Mortgages vs. Adjustable Rate Mortgages

In this video, Debra Roberts, a Mortgage Advisor with Samuel Scott Financial Group, explains the difference between two common types of mortgages: Fixed Rated Mortgages and Adjustable Rate Mortgages.  She breaks down the pros and cons for each type of mortgage and answer the most common questions borrowers have about these two types of home loans.

An Adjustable Rate Mortgage (ARM) is often called a variable mortgage because it tends to vary based on an index and a margin.  It’s not uncommon to see an initial interest rate for an Adjustable Rate Mortgage to be at a discounted rate, usually lower than the rate for a fixed rate mortgage.  Over time, the rates will fluctuate depending on whether or not general interest rates are going up or down.

On the other hand, a Fixed Rated Mortgage (FRM) will not vary over time.  The interest rate and the monthly payment will remain the same over the entire life of the mortgage term, which are typically being 15 or 30 years.

There are a few questions that a Mortgage Advisor will usually ask to help a client determine which type of loan will best suit their financial and lifestyle needs.  The answers a borrower gives to these questions influence the type of loan one chooses in the long run. These questions are:

• How long do you plan on staying in the home?
• What would you qualify for?
• How risk adverse are you?

There are pros and cons to both Adjustable Rate and Fixed Rate mortgages.  Working with a Mortgage Advisor, it’s important to look at the risks/rewards to each program and decide which loan will best compliment your personal situation.

Fixed Rate Mortgages

Pros: You can budget because the payment will remain the same over the entire length of the loan.  You won’t have to plan for a fluctuation in interest, as it will always remain the same.  The bank is taking all the risk on interest rates.  If rates goes up (and since we are at historic lows, they will eventually have to) you are locked in a a great rate.  If rates somehow manage to drop even further, you can simply refinance your loan.

Cons: You may not have the flexibility of shortening your term as much as you would like to with an ARM.  In the long run, you may pay more interest over the life of the loan.

Adjustable Rate Mortgages

Pros:  Typically a borrower will…Read More by Clicking HERE

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An accomplished Mortgage Advisor, I enjoy walking, exercise, travel and spending time with the family — especially my wonderful daughter.

Debra Roberts is an outstanding senior Mortgage Advisor with a client-first mentality and an exceptional track record.

In 1991, Debra began her career at PR Mortgage, which later became McMillan Mortgage.  With a “clients come first” attitude, she became McMillin’s Rookie Loan Officer of the Year and maintained her position as their #1 Loan Officer for the next 12 years.

Debra excels in communication and her ability to expertly guide clients through smooth transactions.  At Samuel Scott, she prides herself on her ability to educate her clients. A skill backed by a BS Degree in Education from the University of Connecticut, where she graduated Magna Cum Laude.

Whether helping young borrowers purchase their first home or aiding the retiree couple move into their final dream home, Debra provides support through out the entire process.  She instills a level of comfort in clients  by preparing them with the knowledge to make purchasing a home a rewarding experience.

Samuel Scott Financial Group is a boutique mortgage company recognized for superior customer satisfaction and the way they tailor the residential loan process to every individual client.  Todd “Samuel” Pianin and Brian “Scott” Reynolds founded the company on the principles of long lasting relationships, and a sincere honest approach to every single individual we serve.  Consistent and reliable, Samuel Scott Financial Group has been selected as The

Best Mortgage Company in San Diego for the 5^th straight year by readers of local publications.

President:  Todd Pianin

Vice President of Sales:  Russ Schreier

Mortgage Advisors:  Christian Alvarez,  Dean Brown, Mark Buchanan, Mitch Palmer, Brian Reynolds, Debra Roberts, Mark Robertson, Alex Scoma, Brian Shaw, Keith Sims, David Talbott.

 

Samuel Scott Financial Group is licensed by the CA Dept. of Real Estate license #01458652 and NMLS identifier 235584. ©2011 Samuel Scott Financial Group. All rights reserved.