Bank of America Mortgage- Fixed and Adjustable Mortgage Loans

MortgageDeciding upon buying your dream home is a crucial decision and not many people are able to do it. Moreover, after you have finalized the right home to enhance the quality of your personal life, it is important to find the right mortgage so that it does not impose much burden on your financial life. Bank of America login lets you access your loan account so that you can keep a check on your finances. From the many options of mortgage loans, let us discuss about the fixed rate mortgage loans and adjustable rate mortgage loans.

Fixed Rate Mortgage Loans

This type of mortgage lets you have a fixed monthly installment for the entire term of the loan.

Expected monthly payments

With a fixed rate mortgage, you can have a consistent financial life that makes it effortless for you to fix a monthly budget for your expenses. The mortgage rate of interest and the total monthly installment of the interest and principal will remain same for the complete term of your loan.

You can take a fixed rate mortgage, if you:

  • Feel that the rate of interest will rise in the coming years and you wish to stick to the present rate of interest.
  • Wish to reside in the house for several years
  • Like to have a stable financial life with a mortgage that offers fixed interest and principal payment that do not change with time

Adjustable-Rate Mortgages (ARMs)

This type of mortgage offers adjustable rate of interest that change according to various factors.

Adjustable monthly payments

Adjustable rate mortgage have a rate of interest that change periodically on the basis of a financial index associated with your loan. In other words, if that index goes down or up, your monthly installment will decrease or increase. The ARM or Adjustable Rate Mortgage is generally named according to the time period for which the interest rate is fixed and the frequency of adjustment to the rate of interest thereafter. For instance, for a 5/1 ARM, the digit 5 means that the rate of interest would remain fixed for 5 years and then it will change once every year after the period of 5 years is over.

You can take an adjustable rate mortgage if you:

  • Wish to shift out of the house before the rate of interest changes after the fixed rate period.
  • If you know that your income will increase in the coming years, so you want to pay less in the initial years and do not mind paying more in future.
  • Think that the rate of interest will do down in future and you will still be in profit.

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