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An Adjustable Rate Mortgage (ARM) is a mortgage loan with an interest rate that can increase or decrease periodically.
This means that the monthly payment can go up or down depending on market conditions.
Most ARM loans have a period in the beginning of the loan where the loan is fixed.
After a certain amount of time the loan converts into a fully adjustable loan with pre set adjustment periods.
The 5/1 ARM is the most common adjustable rate mortgage on the market. In a 5/1 ARM the loan is fixed for the first 5 years, then following with an interest rate adjustment once every year.
|Interest rates and mortgage payments are less than fixed rate mortgages||After the fixed rate period ends, the interest rate could rise, so the monthly payment could go up, too|
|The rate may decrease after the 1st adjustment||Interest rates are unpredictable, so you can't predict what your payments will be in the future|
|Allows the borrower to qualify for a larger loan|
|Perfect for homeowners who plan to live in the property less than the initial term|
Start our easy loan application process today and take one step closer to home ownership.
Phone: (661) 799-8515