If you are about to apply for a home loan, one of the many questions you may be asking yourself is, “Should I get a fixed or adjustable rate mortgage?” While this is a pertinent question anywhere, in a high-demand housing market like L.A., you may feel particularly concerned with making the right choice.
Well, there are two things to consider when making this type of decision:
- What is going on with interest rates
- What your own plans are for the future
You may be aware that a potential (and likely) Fed Funds Rate cut is on the horizon. You also may have heard that this could lead to a reduction in mortgage rates in Los Angeles and across the country. But is that actually true?
As I explained in a recent newsletter, not necessarily. In fact, I believe that they may actually respond by rising rather than falling. Furthermore, mortgage rates are at a low in Los Angeles at the moment. So this is a good time to purchase a home before they rise again.
If you buy a home with a fixed rate for your mortgage, you will not need to worry about mortgage rates rising in the near or distant future. You can lock in one of the excellent low rates which are available right now for the lifetime of your home loan.
If, on the other hand, you choose an adjustable mortgage rate, if rates climb in the future, you could see an increase in what you have to pay after the low rate introductory period expires.
Whether or not this is an issue depends on what your plans are for the years ahead. If you will only be in your Los Angeles home for a short time, you might still save money with a low introductory rate on an adjustable rate mortgage.
I Can Help You Pick the Most Suitable Type of Interest Rate
The bottom line is that there is not a single “best” option when it comes to interest rate formats for home loans in Los Angeles. While this is a fantastic time to choose a fixed rate home loan, there are still borrowers who may benefit from an adjustable interest rate instead.
During your consultation, we can discuss your plans for living in Los Angeles as well as any concerns you may have about interest rate formats. I will take time to patiently answer all of your questions with the goal that by the end of your consultation, you will feel knowledgeable and ready choose the type of interest rate which is most ideal for your needs. To schedule your consultation, please call (818) 601-2231.