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What You Need to Know About Adjustable-Rate vs Fixed-Rate Loans

It’s April and we are in the peak of tax season. With money on our minds we thought it would be a good idea to discuss the rates of loans. That’s because when you're getting ready to buy a home—especially a new one from Justice Homes—one of the biggest financial decisions you'll make is choosing the type of mortgage. It’s not just about how much home you can afford, but how you plan to pay for it over time. The two most common loan types are adjustable-rate mortgages (ARMs) and fixed-rate mortgages. Each has its pros and cons depending on your financial goals and how long you plan to stay in your home.

What is a Fixed-Rate Mortgage?

A fixed-rate mortgage is pretty straightforward. Your interest rate stays the same for the entire term of the loan, whether it’s 15, 20, or 30 years. That means your monthly principal and interest payments won’t change, which makes budgeting a lot easier.

Why choose a fixed-rate loan?

• You get predictable payments that stay the same over time.
• You’re protected from rising interest rates in the future.
• It’s a great option if you plan to stay in your Justice Home long-term, which we hope you do.

What is an Adjustable-Rate Mortgage (ARM)?

An adjustable-rate mortgage usually starts with a lower interest rate for the first few years—commonly 5, 7, or 10 years. After that, the rate can change periodically based on the current market rates.

Why choose an ARM?

• You’ll typically get a lower initial rate than a fixed-rate loan.
• It can save you money in the short term.
• It might make sense if you’re planning to move or refinance before the rate adjusts.

Which One is Right for You?

It really comes down to your long-term plans and comfort level with risk. If you know you’re going to be in your new Justice Home for many years, the stability of a fixed-rate loan may be the better choice. On the other hand, if you’re looking for lower payments early on and don’t mind the possibility of future rate changes, an ARM could be worth considering.

Here are a few questions to ask yourself:

• How long do I plan to stay in this home?
• Can I afford higher payments if the rate goes up?
• Do I value predictability or initial savings more?

Justice Homes is Here to Help

No matter which mortgage type you’re leaning toward, the team at Justice Homes is here to help guide you through the process. We work with experienced mortgage professionals who can walk you through your options and help you make the best choice for your budget and lifestyle.

Buying a home is a big deal, but with the right support and a clear understanding of your financing options, it doesn’t have to be overwhelming. Whether you go with a fixed-rate or adjustable-rate loan, your dream home is within reach—and we’re excited to help you get there!

By Justice Homes Staff 4-1-2025