Adjustable Rate Mortgages
An adjustable rate mortgage (ARM) may be a good option if having a low initial mortgage payment is your primary goal, or if you don’t plan to live in the property for very long.
With an adjustable rate mortgage (ARM) your interest rate can change throughout the life of the loan. Our adjustable rate mortgage products include 5/1 and 7/1 Adjustable Rate Mortgages. This means that your rate is fixed for the first 5 or 7 years of the loan and then can adjust once per year after that. These loans are often referred to as “hybrid” mortgages because they have a period of time where the loan has a fixed rate, and then a period of time where it has an adjustable rate.
Consider an adjustable rate mortgage if you…
- Understand that your monthly payment can change
- Expect interest rates to stay the same or decrease during the life of your loan
- Plan to live in the house for only a few years
Benefits of an adjustable rate mortgage:
- Typically, a lower initial monthly principal and interest payment
- Rate caps limit the amount your payment can increase at each rate adjustment
- Flexibility if you expect your income to increase