A borrower is unsure whether to go with a fixed rate or adjustable rate loan. what kind of questions would you ask to help them

Question

mina [271]

2 years ago

12

A borrower is unsure whether to go with a fixed rate or adjustable rate loan. what kind of questions would you ask to help them

decide?

Business

1 answer:

katovenus [111] · Answer 1 · 2022-07-19T22:06:52+03:00

I would ask them if they were comfortable with a fluctuating rate, which though at the moment is lower than the fixed rate, could go up in the future. I would also ask them if they needed to be sure of the rate say for example for a 5 year term like in a mortgage for peace of mind or if they are willing to take a risk with the fluctuations. If the latter, I would tell them that at any time they could lock it in for a 5 year term if they saw it going up.