What is the difference between a fixed-rate and adjustable-rate mortgage at Allied Home Mortgage Corp.?

At Allied Home Mortgage Corp., the main distinction between a fixed-rate mortgage and an adjustable-rate mortgage (ARM) lies in how the interest rate is structured. With a fixed-rate mortgage, the interest rate remains constant for the entire loan term, providing the borrower with predictable monthly payments. This stability can bring peace of mind as the rate won't fluctuate with market changes. Conversely, an ARM offers an initial fixed-rate period followed by a variable interest rate based on a specific index. This means that after the initial period, the interest rate may rise or fall in response to market conditions, potentially impacting monthly payments. An ARM can be a suitable option for those planning to sell or refinance their home before the initial fixed-rate period expires, or individuals anticipating future income growth. Ultimately, the choice between a fixed-rate and adjustable-rate mortgage relies on personal circumstances and risk tolerance.