Are you considering a 15/15 adjustable rate mortgage for your next home purchase? If so, you’ve come to the right place. In this article, we’ll take a look at what this type of mortgage is, how it works, and whether it’s the right choice for you. So let’s get started.
What is a 15/15 Adjustable Rate Mortgage?
A 15/15 adjustable rate mortgage, or ARM, is a mortgage loan with an interest rate that can change after an initial fixed period of 15 years. After the 15-year period, the interest rate can change once every 15 years. This type of loan is often used by borrowers who want a lower interest rate than a fixed-rate mortgage, but still want the security of a fixed rate for the first 15 years.
How Does a 15/15 Adjustable Rate Mortgage Work?
The way that a 15/15 adjustable rate mortgage works is simple. You’ll get a fixed rate for the first 15 years of the mortgage, and after that period, the interest rate will adjust every 15 years. This means that you’ll have a period of 15 years in which you’ll have the same interest rate, and then it will adjust every 15 years thereafter. This type of mortgage is often used by borrowers who plan to stay in their home for more than 15 years, but want to take advantage of the lower interest rates.
What Are the Pros and Cons of a 15/15 Adjustable Rate Mortgage?
The biggest benefit of a 15/15 adjustable rate mortgage is the lower interest rates. Since the interest rate is fixed for the first 15 years, you’ll have a much lower interest rate than you would with a traditional fixed-rate mortgage. Additionally, the interest rate will adjust every 15 years, so you’ll have the security of knowing that your rate won’t spike unexpectedly.
On the other hand, the biggest drawback of a 15/15 adjustable rate mortgage is the lack of predictability. Since the interest rate is adjustable, you won’t know what your rate will be after the 15-year period. This means that you could end up with a much higher rate than you were expecting. Additionally, if interest rates go up during the 15-year period, your rate could increase as well.
Should I Get a 15/15 Adjustable Rate Mortgage?
Whether or not you should get a 15/15 adjustable rate mortgage depends on your individual situation. If you’re looking for a lower interest rate and plan to stay in your home for more than 15 years, then this type of loan could be a good choice. However, if you’re not sure how long you’ll be in your home, or if interest rates go up, then you may want to opt for a fixed-rate mortgage.
Where Can I Get a 15/15 Adjustable Rate Mortgage?
If you’re looking for a 15/15 adjustable rate mortgage, there are a few places you can look. Your local bank or credit union may offer this type of loan, as well as online lenders. Additionally, some mortgage brokers may be able to help you find a lender that offers this type of loan.
Conclusion
As you can see, a 15/15 adjustable rate mortgage can be a great option for those who want a lower interest rate and the security of a fixed rate for the first 15 years. However, it’s important to understand the risks associated with this type of loan and make sure that it’s the right choice for you. If you have any questions, be sure to speak with a qualified mortgage professional before making your decision.
