Adjustable Rate Mortgage
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An ARM may be a good option to consider if you plan to own your home for only a few years; you expect an increase in future earnings; or, the prevailing interest rate for a fixed mortgage is too high.
Unlike fixed rate mortgages, the interest rate on an ARM will change periodically. Hence, the initial interest rate of an ARM is lower then that of a fixed rate mortgage!
Process of an Adjustable Rate Mortgage Loan
- Complete our simple Adjustable Rate Mortgage Qualifier
- Receive options based on your unique criteria and scenario
- Compare mortgage interest rates and terms
- Choose the offer that best fits your needs
Frequently Asked Questions
How to know if I qualify?
The lower initial payment of adjustable-rate mortgages attracts the majority of homebuyers, who often refinance the loan once the fixed period is through. When that happens, the interest rate turns variable or adjustable, and the homeowner will probably either sell the house outright or refinance into another ARM or something fixed.
Is there a difference between an ARM and a fixed rate mortgage?<br />
A home buyer can choose the best sort of loan for their needs by being aware of the various loan alternatives accessible to them. A fixed-rate mortgage’s interest rate is predetermined at the time the loan is obtained, in contrast to an adjustable-rate mortgage. Over the course of the loan, it remains constant. Based on the current interest rate, the interest rate on an adjustable rate mortgage could increase or decrease.
What are the advantages of an ARM mortgage?
The initial lower interest rate that is provided to a borrower and the flexible loan terms that an ARM mortgage offers are its two key advantages.
A potential homebuyer may be able to afford a property at a higher market price or with a smaller down payment thanks to ARM mortgages.
An ARM mortgage also offers flexibility. There are several possibilities for the introductory period’s duration and the frequency of adjustments during the loan’s term. If a homebuyer does not intend to reside in their property for an extended period of time, this flexibility is useful.
Ready for an Adjustable Rate Mortgage?
Get pre-approved with LightPoint Mortgage in as little as 30 minutes.