Adjustable Rate Mortgage (ARM) – A Viable Alternative for the Short Term Home Owner?
If you are looking to move to an area, but only for a short amount of time- say, three to five years- then you would be forgiven for thinking that your only option is to rent. While the longer you own a home is usually variable to how likely you are to come out on top once you sell it, contrary to popular belief there are options out there to ensure your short-term home doesn’t leave you lacking. Considering the obvious advantages to getting on the property ladder, no matter how long you stay in an area, short-term home owning may not be as financially painful as you think with the help of an adjustable rate mortgage.
Get the most out of your short-term residence
Usually, your adjustable rate mortgage will enjoy a fixed rate of interest for a certain amount of time after purchase. After this your mortgage will be subject to interest rates, but that grace period will allow you ample time to save and prepare for the potential costs ahead- you may even find yourself paying less once the interest climate becomes a factor. Another enormous advantage of an adjustable rate mortgage is the opportunity and freedom to overpay or leave at any time. Should the housing market heat up in the area you’ve moved to towards the end of your planned ownership- which, for a short-term home owner, is of course the ideal- this is invaluable for reaping the rewards of your investment without the costs that could come with severing another agreement.
Not for the faint of heart, but fortune favours the brave
Your short-term stay in an area- whether to study, be temporarily closer to family or for work- could become a valuable investment that cuts out the accumulative costs and tax that renting brings, becoming a long-term benefit that puts you on the property ladder. For more advice on whether your circumstances suit an adjustable rate mortgage, visit newcityfinancial.com.