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Adjustable Rate Mortgages

Why take out adjustable rate mortgages?

Upon first glance at these resources, you may wonder why you’d ever choose an option that did not provide you with set, consistent payments each month. Wouldn’t fixed rate mortgages be the best choice?

ARMs

For some borrowers, definitely. But many others prefer lowered bills throughout the initial stages of the homeowning process. THIS is exactly what adjustable rate mortgages can guarantee.

What are the details of adjustable rate mortgages?

The most common adjustable rate mortgage is known as “5/1.” Under the terms of this package, interest remains reasonable and steady for five years. After that term, rates may rise (or fall) based on various economic indexes. You may choose to refinance your home mortgages at this time - or you may simply accept the new rate.

What are caps on adjustable rate mortgages?

Keep in mind that no adjustable rate mortgage can rise by TOO much at one time. Caps are placed on interest, so that you’re not overwhelmed by a sky-rocketing monthly bill at any point. There are both caps for each rate adjustment, as well as overall caps for the lifetime of the loan.

Nationally, a majority of borrowers begin with adjustable rate mortgages. They may refinance to a fixed rate home loan down the line or they may be prepared for mortgage rates to rise.

Either way, it’s simply important to remain informed. Talk with our experts and brokers to understand these options - it could mean the difference between a beautiful new home right now or time wasted trying to figure out how to finance it.

Choose the former today.