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 Interest Rate Information 

EHO

At Your Fingertips...

Fixed or Adjustable Interest Rates... Which is the best for you?

There are many different types of home loans to choose from. Do you need a fixed rate or an adjustable rate mortgage, or somewhere in between? Deciding which particular loan makes the most sense for your financial goals means that you need to understand the benefits of each.

Whether you are wanting to buy a home or refinance your current mortgage, you'll find that the majority of home loans fall into two basic categories. The following is a list of reasons why you might select one over the other:

Fixed Rate Mortgages   Adjustable Rate Mortgages
  • You are planning to live in your home for more than 5 years.
  • You prefer the stability of fixed monthly payments (principal and interest).
  • You don't want to run the risk of future monthly payment increases.
  • You believe that your income will stay about the same during the next 5 years.
 
  • You are planning to stay in your home for less than 5 years.
  • You don't mind having your monthly payments change (either up or down).
  • You are comfortable with the risk of possible payment increases.
  • You believe that your income will increase during the next 5 years.
The Following Information Will Help You to Better Understand the Differences

Fixed Rate Information
Adjustable Rate Information

After you have decided on the type of interest rate that would best suit your needs, you will most likely be ready to apply for a home loan. When your loan has been approved you will need to make another important decision. You will need to lock or float the interest rate on the loan. Well, what exactly does that mean?

  • Locking the Rate: You will be guaranteed that the monthly payments of your home loan will be calculated utilizing the interest rate on the day the rate was locked. Various lenders may offer rate locks for different periods of time. The most frequently used is a 30 day rate lock.

  • Floating the Loan: You are telling the lender that you want to take a chance that interest rates will lower by the time your loan closes. Needless to say, you run the risk that interest rates will rise and your monthly payments will be higher than initially anticipated. If the rates increase, you may no longer qualify for the original loan amount based on the percentage of your gross income that the lender approved as your maximum monthly payment.

If there is a possibility that you might not qualify for the loan amount requested if interest rates increase, don't take the chance of losing out on a home that you want to buy. Lock that rate when approved.


Please Note: Our friendly staff of professionals are available to help you with all of your home loan and mortgage needs, Monday-Friday (8-5). If you are out of town, please call 888-475-3273 toll-free. If you did not find what you were looking for on our website, please click here to let us know.


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Louisiana Home Loans and Mortgage Services
Home Purchases  |   Refinancing Loans  |   Debt Consolidation  |   Home Equity Loans  |   2nd Mortgages  |   Home Improvements
Apply Now  |   Mortgage Calculator  |   The Learning Center  |   Your Valued Opinion  |   Contact Us
Site Map  |   Realtor's List  |   Commercial Loans  |   Builder's List  |   Q's & A's
Homes for Sale by Owner  |   Free Home Locator Service

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