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Is a Variable Rate Mortgage Right for You?
- Can increase monthly cash flow
- Always a lower rate than fixed mortgage
- Freedom to convert to fixed rate
Why should you choose GLM Mortgage Group?
“We Get You a Fast “YES”at the Sharpest Rate…Guaranteed”
What Is a Floating Rate
There are two main types of mortgages to consider: fixed-rate mortgages and variable-rate mortgages, also known as floating. A fixed-rate mortgage provides the borrower with an interest rate that remains constant throughout the entire lifetime of the term. A variable-rate mortgage implies fluctuating interest, which means that your mortgage payments will also fluctuate.
With a variable-rate mortgage, the interest rate attached to the loan is subject to change as the economy and housing market changes. Each month, a set amount will be paid toward the mortgage principal, but the amount applied to the interest may fluctuate. There are a number of reasons why choosing a variable interest rate may be a good choice. They’re typically easier to qualify for than fixed-rate mortgages and, for many, choosing this type of mortgage is a necessity in order to qualify for the home they want to purchase.
Variable or floating mortgages also commonly provide buyers with a lower initial interest rate. In some cases, these rates are locked in for the first year of the mortgage and then subject to change thereafter. It’s important to understand that the interest rate of a variable-rate mortgage can change dramatically and quickly. Often, borrowers who choose a variable rate are caught off-guard when their mortgage payment drastically increases. Professionals have started calling this “payment shock” and, for some people, it can become difficult to make their monthly payment.
If you choose a variable rate, you must be prepared for the possibility of a rise in your monthly payment. If you set aside money to allow for monthly increases, you’ll be fine. Talk to a mortgage broker to discuss which type of mortgage rate is best suited for your specific situation.
Tools & Resources For Success!
Good Credit Guide
GLM will help you to obtain and maintain good
credit, which is critical for obtaining a mortgage.
Our free Guide to Obtaining Good Credit
outlines the steps required to quickly improve
When searching for a home, the first step is to determine what you can comfortably afford. Our free, easy-to-use mortgage calculator will help you determine the amount of your mortgage payments.
Posted Mortgage Rates
GLM Mortgage Group always posts the best rates available anywhere. Our mortgage brokers have access to dozens of lenders, we’re able to find the best mortgage product and rate to match your unique needs.