April 28, 2006, Newsletter Issue #13: The Adjustable Rate Loan

Tip of the Week

Because veterans hunt for their VA guaranteed loan in the same places people go to get non-VA home loans, it pays to shop around. You can get a fixed rate loan, which you'll negotiate with the bank, but there is also the option of an adjustable rate loan.

On these loans, the interest may be adjusted one percent annually, and up to five percent over the duration of the loan period. Fixed rate or adjustable? It really depends on the buyer, but the best advice regardless of which option you prefer is to do your homework, shop around and look for the most competetive rate. Don't take the first offer you get. Doing so is the mistake of some first time home buyers who are excited, intimidated by the whole process or simply eager to get it over with and get into a home. Time spent researching the biggest purchase of your life will yield good results.

When in doubt, consult an expert, a legal advisor or a trusted friend in the real estage business. Whether you choose a fixed rate loan, or the VA adjustable rate, be sure you've gotten plenty of trustworthy advice from those in the know. The more research you do, the better you'll feel at closing time. The VA is in the business of loan guaranty, but the choice of which loan to take is strictly up to you

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