The difference between ARM Mortgages and Fixed Mortgages

The current banking crisis was partly caused by ARM Mortgages. These mortgages were based on what the current federal interest rate was.

The only problem was the rate could fluctuate and towards the end it really did. People soon saw the mortgage go beyond what they could afford monthly and so the housing market feel hard.

This of course also soon threw the banking industry into disaster as they found themselves with assets they could not sell easily.

That is why a Fixed Rate Mortgage is a wiser choice. When you get approved for a mortgage that has a fixed rate you know exactly what your mortgage will be each month and not have to worry about the mortgage inflating like a balloon.