Houston Credit Repair Expert, Vanessa Perry, explains the difference between ARM and fixed mortgages in the latest episode of Ask Impeccable.
When someone is in the market for a home they must choose to rent or buy. If they choose to buy they must qualify for a mortgage. There are different types of mortgages. A fixed mortgage and an adjustable rate mortgage (also known as an ARM).
The Difference Between Fixed and ARM
Fixed mortgages are a fixed rate for the term of the mortgage. An ARM is fixed for a certain amount of time and is converted to an adjustable rate after the stated fixed period.
15 Years Fixed
20 Years Fixed
30 Years Fixed
2/28 Arm: 2 years fixed, 28 years adjusts
The only time someone should consider an arm is if it is for a large. sum of money. Many times people will consider an ARM if they are trying to fix their credit in that period of time to refinance. That is a waste of time and money. Wait to qualify for the best fixed rate and avoid refinancing.
Houston Credit Repair
Before applying for a loan make sure you check with Impeccable Credit Services to see what your credit score actually is. It is best to go through credit experts first to understand your credit completely and the next steps in the home buying process. If you do not qualify for the best rate, we highly suggest waiting until you do. This is because the difference between just qualifying and the best rate can be $90k or greater on a $200k home. You will qualify for a mortgage loan at a 640 middle score. However, getting the best rate on your home loan will take a 740 credit score. Make sure to contact Impeccable Credit Services for all of your credit needs and questions.
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