Fixed Rates are Very Low!

Low-Interest Rate Mortgage Solutions

Looking for a way to beat current interest rates? Adjustable-Rate Mortgages offer borrowers lower interest rates in the initial years of the loan, helping you keep more money in your pockets.

 

What is an Adjustable-Rate Mortgage (ARM)?

An ARM is a mortgage option with an interest rate that will adjust based on the market. In the initial years of the loan, typically, the first 5, 7, or 10 ARMs offer borrowers a low fixed interest rate depending on your loan terms. After the fixed rate period, your interest rate will adjust annually for the remainder of the mortgage based on the index rate. This rate adjustment can cause your monthly mortgage payments to change as well.

 

For example, a 7/1 ARM features a fixed interest rate during the first 7 years of the loan. Starting in year 8, the interest rate adjusts once a year (that’s the “1” part) after that for the remainder of the mortgage. It is important to note that there is usually a cap on the percentage that the rate can adjust annually and the total rate adjustment possible over the life of the loan.

 

How Does an Adjustable-Rate Mortgage Work?

ARMs have interest rates that adjust depending on the movements of the market. The rate will adjust at the end of the initial fixed period (which is 5, 7, or 10 years long, depending on the ARM you choose). This adjustment is limited by caps, which limit:

 

• How much the interest rate can change at each adjustment period

• How much the interest rate can change overall.

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