Scores of people recently obtained mortgages that are not up for adjustment.
Their loans were simply fixed for 2 years or 3 years and now these borrowers face their loan turning adjustable and their monthly payment skyrocketing.
There are several options to refinance out of your current adjustable loan. These loan options include:
- 5 year interest only
- 30 year fixed
- 30 year fixed, 10 year interest only
- 40 year loan
5 Year Interest Only
This is a loan that is fixed for only 5 years and requires an interest only payment. If you plan on keeping the property for only one or two years than an interest rate that is stable for 5 years may work for you. This loan frequently has a lower interest rate than a 30 year fixed rate.
30 Year Fixed
This is the traditional secure loan. The interest rate never changes for the life of the loan. This is the most payment immovability you can get in a mortgage.
This type of loan typically has the highest interest rate and monthly payment.
30 Year Fixed, 10 Year Interest Only
This is the similar to the 30 year fixed loan, except that the first 10 years require only an interest payment. This is lower than a regular payment. It has the advantage of interest rate stability with a lower payment up front.
40 Year Loan
This type of loan stretches your payment out so that you don't pay as much as a 30 year fixed.
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