Why should I choose a fixed rate over an adjustable rate loan?

There are probably more loan options available to the borrower than ever before. Whether a fixed rate loan is better that an adjustable rate mortgage (ARM) or any of the many ARM derivatives depends on the financial situation and plans of the individual borrower. Generally, if the borrower plans to be in the home seven to ten years or more, fixed rate loans offer greater long term payment certainty. For shorter anticipated stays, an ARM or ARM hybrid will usually offer lower payments compared to fixed rates.

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