Navigating Your Mortgage: Fixed or Adjustable, Asset or Liability?

Navigating Your Mortgage: Fixed or Adjustable, Asset or Liability?

  • Faber Real Estate Team
  • 11/7/23

Navigating Your Mortgage: Fixed or Adjustable, Asset or Liability?

In today’s fluctuating market, it's paramount to re-evaluate your mortgage periodically. Whether you hold a fixed-rate mortgage or an adjustable one, understanding the nuances and timing can unlock opportunities, either to refinance, sell, or hold onto your property as a strategic asset. This evaluation is not just a number-crunching exercise; it's a path to securing the future you envision, a cornerstone of our commitment at Faber Real Estate Team - being "The Key To Your Dreams®."

The Fixed-Rate Mortgage: A Constant in an Ever-Changing Market

A fixed-rate mortgage offers stability. It's a sanctuary in a volatile financial climate. As the name suggests, the interest rate on your mortgage remains constant throughout the term of the loan. This predictability makes it easier to plan for the future, without worrying about fluctuating payments.

But what if you're holding a mortgage with a '23 handle,' meaning an interest rate that starts with the number 2? It's a competitive rate in today's market, often viewed as a financial boon. The question is, should you stay put to maintain this attractive rate, or should it propel you to consider buying your future home now?

The Adjustable-Rate Mortgage: A Gamble or a Goldmine?

With an adjustable-rate mortgage (ARM), the initial interest rate is typically lower than that of a fixed-rate mortgage but can change over time. These mortgages come with a certain unpredictability, as rates and payments can increase based on market conditions. Knowing when your rate adjusts is crucial. If it's due soon, it’s an opportune moment to reassess.

When Is the Right Time to Act?

This juncture in your financial journey calls for a strategic pause. Is now the golden moment to leverage your current mortgage, or is it time to unlock the door to a new property? Deciding whether to sell your current home could depend on the market forecast and your long-term goals.

Your Current Home: An Asset to Cherish?

There’s an interesting perspective to consider - your mortgage itself can be an asset. A compelling insight from Compass's CEO suggests that a 30-year fixed-rate loan with an interest rate of 3% or less isn’t just a debt; it's a financial asset. In a world where interest rates fluctuate, locking in a low rate can be a financially savvy move.

What’s Your Next Move?

Do you hold onto your current home, recognizing the mortgage as a valuable asset in your portfolio? Or is the smart play to step up to a new property that aligns more closely with your future dreams? As you contemplate these decisions, remember that they aren't just transactional—they're deeply personal.

Every scenario is unique, and the right answer is different for everyone. It's essential to partner with a real estate team that understands the intricacies of the market and how they align with your dreams. At the Faber Real Estate Team, we specialize in not just houses, but homes—the foundation of your life and dreams.

Are you considering your options with a current mortgage? Reach out, and let’s unlock the possibilities together.

Faber Real Estate Team | Compass
The Key to Your Dreams ®
Ben Faber DRE #01913767
[email protected]

The Key To Your Dreams ®

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