Considering an Adjustable-Rate Mortgage: Pros and Cons for First-Time Home Buyers

Sunday, 19 May 2024, 10:00

A recent survey shows that 1 in 4 first-time homebuyers are now considering an adjustable-rate mortgage (ARM). The article outlines 2 key pros: lower starting interest rates and relief from high initial costs. However, it also highlights potential cons such as the risk of increased mortgage rates and uncertainty about future payments. It suggests careful consideration when opting for an ARM, weighing the benefits against the risks before making a decision.

https://store.livarava.com/21e61511-15c7-11ef-a6c2-63e1980711b2.jpg — Considering an Adjustable-Rate Mortgage: Pros and Cons for First-Time Home Buyers

Pros and Cons of Adjustable-Rate Mortgages

Is an adjustable-rate mortgage right for you? Read to see why it may or may not be.

Pro No. 1: You can get a lower starting interest rate
Pro No. 2: You can get a break from higher monthly payments
Con No. 1: You risk seeing your mortgage rate climb after a period
Con No. 2: You'll have less peace of mind

It's hardly a secret that today's mortgage rates are the highest they've been in years. So if you're in the process of trying to buy a home, you may be inclined to sign an adjustable-rate mortgage, or ARM. In a recent survey of first-time homebuyers by TD Bank, 23% of respondents said they're considering an ARM, up from 12% in 2023. But should you go that route if you're looking to buy? Here are a couple of pros and cons to be aware of if an adjustable-rate mortgage is on your radar.

This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.

Pros and Cons of Adjustable-Rate Mortgages

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