Easy Home Equity Loans

Variable Rate Loans vs. Fixed Rate Loans

You probably already have your reservations about which type of interest rate you like, variable (adjustable) or fixed rates. In fact many people get immediately turned off by adjustable rates when there is little to be afraid of if you know what you are doing. You can actually save tens of thousands of dollars over the life of a loan with an adjustable rate. The reason is they always start out lower than a fixed rate and usually the earliest they would hit parity with a fixed is in 3-5 years. That doesn't mean they will ever hit parity and that doesn't mean the rate will not keep increasing either. They may increase up to their cap which is generally in the neighborhood of 11-15%. With variable rates it is a good idea to follow the interest markets from time to time to see which way things or going. Fixed rates are always popular when interest rates are low in general because you can lock in for the life of the loan and not have to follow the market as closely. The disadvantage to a fixed rate is that these loans offer very few options and you are somewhat stuck with what you get initially.

Types of Variables
 - Home Equity Line of Credits are almost always variable
 - Some traditional 2nd's
 - Stated Income Loans
 - Bad Credit Home Equity Loans

Types of Fixed
 - Traditional 2nd's
 - Some Bad Credit Home Equity Loans
 - Many 1st Mortgages

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