Need a Loan? Go For a 5 Year ARM
ARM here means an adjustable rate mortgage.
No, it does not mean that it is adjustable as per our needs.
It means that it is adjustable as per the interest rates prevailing in the market.
A mortgage, in the present world, is something everyone is afraid of, bankers and common people alike.
However, a 5 year ARM is something that is more sensible than what used to be before.
Unlike previous mortgage plans, it does not go by the belief that real estate prices will rise forever.
In a 5 year ARM, you will be charged a fixed rate of interest that is very nominal as per your needs, and will help you get by comfortably.
But once this honeymoon phase ends, the real rodeo starts.
You will be charged an interest rate that is currently prevailing in the market.
So if you are a college grad, you may want to used those initial 5 years cautiously, and not spend frivolously.
Also, looking for a job as soon as you can (perhaps just before your last semester starts) would be a good idea.
These interest rates may be high or low, depending on what the Feds decide.
However, there is still no reason to be worried.
A 5 year ARM comes with a maximum interest rate, which is the most they will charge you, and not beyond.
You would want to find out what that interest rate is, and then calculate to see if you would be able to pay that much, after you get a job, For example, if you are planning to do your MS from MIT or Princeton, it is quite possible that you will be earning a 6 digit figure at the end of 5 years.
Depending on these calculations, you can decide if the 5 year ARM rates are acceptable for you.
5 year ARMs are not fool proof packages.
Anyone who once takes a mortgage has to be extra cautious about spending money.
Those days of frivolous spending and maxing out 30 credit cards, to buy designer clothes and footwear, are gone.
No, it does not mean that it is adjustable as per our needs.
It means that it is adjustable as per the interest rates prevailing in the market.
A mortgage, in the present world, is something everyone is afraid of, bankers and common people alike.
However, a 5 year ARM is something that is more sensible than what used to be before.
Unlike previous mortgage plans, it does not go by the belief that real estate prices will rise forever.
In a 5 year ARM, you will be charged a fixed rate of interest that is very nominal as per your needs, and will help you get by comfortably.
But once this honeymoon phase ends, the real rodeo starts.
You will be charged an interest rate that is currently prevailing in the market.
So if you are a college grad, you may want to used those initial 5 years cautiously, and not spend frivolously.
Also, looking for a job as soon as you can (perhaps just before your last semester starts) would be a good idea.
These interest rates may be high or low, depending on what the Feds decide.
However, there is still no reason to be worried.
A 5 year ARM comes with a maximum interest rate, which is the most they will charge you, and not beyond.
You would want to find out what that interest rate is, and then calculate to see if you would be able to pay that much, after you get a job, For example, if you are planning to do your MS from MIT or Princeton, it is quite possible that you will be earning a 6 digit figure at the end of 5 years.
Depending on these calculations, you can decide if the 5 year ARM rates are acceptable for you.
5 year ARMs are not fool proof packages.
Anyone who once takes a mortgage has to be extra cautious about spending money.
Those days of frivolous spending and maxing out 30 credit cards, to buy designer clothes and footwear, are gone.
