For borrowers who are seeking short-term security and stability, an Adjustable Rate Mortgage (ARM) provides a fixed payment for a specified period of time, normally at lower rates than offered for a fixed rate mortgage. ARMs are tied to an index, whereas the rate changes your payments can go up or down in relation to those changes.
With adjustable rate mortgages, the initial rate can be lower than fixed-rate mortgages because the borrower assumes risk over the life of the loan and possible higher payments down the road. However, if rates remain steady or low over a long period of time an ARM could be a less expensive option.
An ARM could be a great option for you if you plan on owning your home for a few years, or plan on refinancing shortly after purchasing. Deciding on an ARM depends highly on current interest rates and your individual situation and flexibility.
We offer adjustable rate mortgages and various terms to fit your needs. Contact Us today to discuss.
You can also read the Secure One Capital Guide to Adjustable Rate Mortgages.