Know More about Virginia Mortgage Lenders
Virginia mortgage lenders primarily offer two types of mortgages to home loan seekers. This includes fixed and adjustable mortgage loans. Most lenders push for adjustable mortgage loans because it helps them to capitalize on the fluctuating interest rates. Should you, as a loan seeker, go for adjustable mortgages or not is the moot question.
Going for adjustable mortgage loans has its advantages and disadvantages. Those who opt for it do so in the first place because it offers a lower monthly payment. Banks offer lower initial rates of interest because in an unpredictable market you expose yourself to the risk of higher rates of interest. In case the rates shoot up, your monthly payment can go up sharply. This means with adjustable rate mortgage an affordable payment can become unaffordable at any point of time. In the worst scenario you may even have to default on your loan.
Virginia mortgage lenders provide caps to adjustable mortgage rates. This ensures that borrowers remain insulated from a sharp rise in the interest rates. For instance if a borrower has a periodic cap of 1% then the rise in rates would only be up to 1% even if the market rates have risen up to 3 per cent. Life time caps adjust in a similar manner. If you have got a lifetime cap of 4%, the interest rate on your loan will not go beyond 4 per cent.
Your rate may at one time be at par with the market or even rise above the market rate. When interest rates rose 2% your rates just went up by 1%. Even if interest rates do not change the following year, the rate charged from you will go up by another 1% as per the terms.
If you are willing to take risks in the belief that fortune favors the brave, opt for adjustable mortgage rates offered by Virginia mortgage lenders.
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