How Adjustable Rate Mortgages Work
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Your interest rate is fixed for a specific period. After that, your interest rate may change annually depending on the market. That means your monthly mortgage payment can go up or down each year. Your rate won’t increase more than 5% of the original rate throughout the life of the loan.
A popular option is a 5/1 Adjustable Rate Mortgage, or ARM where your interest rate is fixed for 5 years.
The truth is, many consumers have benefited from ARMs and prefer to use them as a tool to save money in the short-term while planning for the long-term. As rates rise, the spread between fixed and adjustable rates widens.
Types of Adjustable Rate Mortgage
FHA offers an ARM option
Qualified veterans, service members and spouses are eligible for an ARM with a VA loan
How You Save with an Adjustable Rate Mortgage
.. Your starting interest rate is typically lower than other kinds of loans
.. Your starting interest rate is typically lower than other kinds of loans
.. Today’s low interest rate for a 5/1 ARM is 4.125% (5.026% APR)
.. Monthly mortgage payments are more affordable during the first years
.. Down payments can be as low at 5% on a home loan purchase
.. Refinance up to 95% of your current home’s value
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Talk with Loan Officer (626) 701-4159