Equal Home Finance Bureau ALERTS!

Be Careful with Variable Rate Loans

While the Equal Home Finance Bureau has successfully documented many ways to save money using the variable home loans that are available, variable rate loans have been the source of a lot of stress for consumers.

There are times when a flex loan can be a powerful way to save money (a flex loan has a fixed rate for a set number of years, followed by a variable rate for each year thereafter). However, we usually recommend that the consumer refinance prior to reaching the variable period, should they need the loan at all at that point in time. Maintaining a loan through its variable period can be tantamount to playing with fire, unless you really know what you're doing.

Consumers who have been coaxed into variable rate loans have experienced ridiculously high rate changes over time that have far negated the early "teaser" rates that seem to accompany them.

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