Pros and cons of fixed, adjustable mortgages

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

(This is Part 2 of a seven-part series. See Part 1: Mortgage shopping: what you should know before you begin; Part 3: Three options available on most mortgages; Part 4: How long should you take to pay off your mortgage? Part 5: Investment returns influence real estate down payment; Part 6: Understanding choices in mortgage insurance and Part 7: Navigating real estate loan locks, docs.) This is the second article of a series on the decisions mortgage borrowers should make prior to entering the market. This article is about the single most important decision of people's lives: the type of mortgage. Adjustable-rate mortgages (ARMs) have lower payments in the early years than fixed-rate mortgages (FRMs) but expose borrowers to the risk of higher payments in later years. Among different types of ARMs, those with a short initial rate period have lower initial rates and payments than those with longer initial rate periods, but carry greater risk of future rate and payment increases. Many...