One of the first choices a home buyer will need to make is whether you want a fixed-rate or an adjustable-rate mortgage loan.

An adjustable-rate mortgage, (ARM): The interest rate of the mortgage adjusts periodically based on market conditions. For example, your payment will go up if rates go up and go down if rates go down.  Some ARM’s are fixed for 3, 5 or 7 years and then adjust each year.  Others may be fixed for 5 years and then adjust and are fixed for 5 more years before adjusting again.

Fixed-rate Mortgage: Unlike an adjustable-rate mortgage the interest rate is set at the time you take out the loan and will not change. Fixed-rate home loans can be 10 years, 15 years, 20 years, 25 years,  or 30 years fixed.  30-year fixed is the most common for purchases because it allows your mortgage payment to be the lowest.  For many refinances people opt for 15 years as they are looking to pay the mortgage off sooner.  When rates are low most people opt for Fixed rates and when rates are high the pendulum swings to people hedging their bets and shifting their preferences to ARM’s.

Right now most of our customers are looking for fixed rates.  If you are interested in an ARM please ask your loan officer to price that out for you and go over the advantages and disadvantages with you.

Alligator Mortgage Company is licensed throughout the State of Florida and our loan officers are trained to help guide you on the best choice for your situation.