Adjustable Rage Mortgages (ARM)

Adjustable rate mortgages also known as ARMs, differ from a fixed rate mortgage in that the interest rates move up or down depending on market conditions. After the fixed period of time, the interest rate adjusts yearly on the anniversary of the mortgage.

Since ARMs are typically offered at lower interest rates than fixed rate loans , they can be a smart choice for borrowers who believe there is a likelihood of selling their home or refinancing. A lower interest rate makes it easier to qualify for a loan because less income is needed to qualify for a lower monthly payment. In addition, the lower interest rate may allow you to borrow more money and purchase a larger home or one with more features. ARM borrowers, generally, are not “locked-in” to high interest rates in place at the time they obtain their loans, since ARM rates adjust downward if rates go down.

ARM Advantages

• Lower initial rates which allow you to purchase MORE house for the rate
• Ability to adjust with the market by not being locked-in
• An initial fixed term option is a great alternative to longer-term fixed rates for those buyers that know they will not be in their home forever
• Adjusts at specified times during the life of the loan which means you know exactly when to expect a change and how much the change may be

3/1, 5/1, 7/1 & 10/1 Convertible ARM

Do you want the stability of a fixed-rate mortgage, but seek the lower rates typically associated with ARMS? Convertible ARM loans feature the lower rate of the our ARM, and the option of becoming a secure fixed rate when you choose.

Adjustable Rage Mortgages At A Glance