Loans Guide

There are arguments both for an against taking out a fixed home equity loan, but in a tight credit market, the proponents for the fixed rate win every time. During time of easy credit and low rates, many people took advantage of adjustable rate mortgages, allowing them to purchase a home based on a low interest rate. As long as the rate remained stable, they enjoyed the fruits of their labor. However, when the prime interest rates began to rise, so did the interest on their home loan as well as the monthly payments.

Since the payments are established based on a set interest rate and a total amount spread over a specified amount of time, there is only one variable that can be changed during a market fluctuation