Hunt Valley, MD -- (SBWIRE) -- 11/07/2014 -- Researchers at the University of Chicago declare an adjustable rate mortgage provides a significant boost to the economy, thanks in large part to the lower initial payment, as reported by Consumer Affairs. In this study, researchers found a mortgage payment reduction of $150 corresponds to this increase in spending along with a reduction in mortgage defaults.

Often, this money is used to improve one's credit rating or to purchase a vehicle. In addition, individuals making use of this type of loan tend to pay their credit card debt down, with approximately 70 percent of the money they save on the mortgage being used for this purpose, as reported in the study.

"As this study shows, obtaining an adjustable rate mortgage may lead to a reduction in credit card delinquencies and mortgage defaults. Individuals who have overlooked this type of loan in the past need to reconsider, taking these benefits into account," Michael Paul, spokesperson for Direct Mortgage Loans, announces.

An adjustable rate mortgage benefits those looking to refinance or move within the next decade, typically within five, seven, or ten years. The interest rates run lower than those seen with 30 year fixed rates, and rate changes are capped at a certain percentage above the initial fixed rate.

The cap protects consumers from rising interest rates, and the fixed period lasts for the time established in the initial mortgage contract. After the initial period expires, the lender adjusts the rate a maximum of one time per year. Savings achieved with this type of loan tend to be significant, based on many variables.

"Direct Mortgage Loans offers a wide range of products to meet the needs of all consumers. Select from Armed Forces loans, loans designed for first time home buyers, and conventional 95 mortgages. Those looking to move away from the city and enjoy the benefits of rural life find the company offers a loan for this purpose, and the same holds true for those looking to refinance a home, making use of the HARP program," Paul continues.

Individuals often have questions concerning the home purchase and/or refinance process, questions involving the importance of being qualified for a mortgage before searching for a home to advice on how to obtain the best rate. Direct Mortgage Loans assists with these and many other questions.

"Turn to Direct Mortgage Loans for assistance as the company works to find a mortgage that feels like home for each client. Many factors contribute to the success of a home purchase or refinance transaction. Direct Mortgage Loans understands these factors and works to ensure the client is satisfied at each stage of the process," Paul declares.

About Direct Mortgage Loans
Direct Mortgage Loans works to determine a client's financial goals and find a solution which allows them to achieve their goals. A privately owned and operated company, this licensed direct mortgage lender employs only those loan officers having at least three years of experience in mortgage banking, and all must undergo 40 or more hours of training in ethics, non-traditional lending, and federal law. The company focuses on responsible lending, courteous service, and complying with industry best practices.