Adjustable-rate mortgages (also referred to as ARM’s) feature an interest rate that periodically adjusts according to the changing market rates. These changes can be UP or DOWN! ARM’s are attractive because they offer start rates that are lower than the interest rates of fixed-rate loans. ARM’s typically enable you to begin with a lower monthly payments and can qualify you for a larger loan. A
"start" rate, also known as the initial interest rate, gives you a special low monthly payment for a set period of time, typically 1,3,5,7 or 10 years.
After the start rate period is over, your interest rate is based on the performance of a financial index, such as the average interest rate or yield on treasury bills. For a better understanding on the historical perspective, call us for an appointment!
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Choose an adjustable-rate loan if you: |
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Need extra borrowing power |
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Need a lower initial rate too afford to buy the home you want
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Want to save money in the first few years of home ownership
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Want to save money in the first few years of home ownership
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Plan to move or refinance in a few years |
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Are purchasing or refinancing at a time when interest rate are comparatively high
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