Adjustable-Rate Mortgages (ARM) are Available!
Adjustable-Rate Mortgage Options
These types of mortgages typically have lower initial interest rates compared to fixed-rate mortgages, making them a popular choice for borrowers who plan to sell or refinance their homes within a few years. However, ARMs come with some risk as the interest rates can increase, causing higher monthly payments. There are different types of adjustable-rate mortgage options available, including hybrid ARMs that have a fixed interest rate for an initial period and then switch to adjustable rates.
The Adjustable-Rate Mortgage Loan Process
The ARM loan process involves determining if an ARM is right for you, shopping for
lenders, submitting an application, getting pre-approved, choosing a loan program, locking in your rate, providing additional documentation, closing on the loan, and making payments.
Do I Qualify?
The initial interest rate on an ARM is usually lower than that of a fixed-rate mortgage, butn after a set period of time (often 5, 7, or 10 years), the interest rate can adjust up or down based on the movement of the index. This means that the borrower’s monthly payments may increase or decrease, depending on the direction of interest rates.
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