The most popular method of financing a home purchase
is with a mortgage. This is a loan that is secured over the home. There
are a number of different suppliers and you will have to shop around in
order to get the best deal. Given that your home is probably the single
biggest purchase you will make in your lifetime,
With the adjustable rate, some of the risk of changing interest rates
that would otherwise fall on the bank is transferred to the borrower.
They are therefore cheaper averaging somewhere between 0.5% to 0.2%
lower than a 30-year fixed rate mortgage. If the rate is particularly
volatile or difficult to predict than a fixed rate mortgage may not even
be possible. In the majority of cases, the savings of an ARM outweigh
the risks of a rising interest rate. Especially where the mortgage is
for ten years or less.