Flexible Financing
What is an Adjustable-Rate Mortgage (ARM)?
An Adjustable-Rate Mortgage (ARM) is a type of home loan with an interest rate that adjusts periodically based on market conditions. ARMs typically start with a lower fixed interest rate for an initial period, followed by periodic adjustments. This can make your initial monthly payments more affordable and potentially offer savings if market rates decrease.
Key Features:
Lower Initial Rates: ARMs often start with a lower fixed interest rate for a set period, which can make your initial monthly payments more affordable compared to fixed-rate mortgages.
Rate Adjustment Periods: After the initial fixed-rate period, the interest rate adjusts at predetermined intervals, usually annually, based on market conditions.
Interest Rate Caps: ARMs include caps that limit how much the interest rate can increase at each adjustment period and over the life of the loan, providing some protection against significant rate increases.
Potential for Savings: If market interest rates decline, your ARM rate and monthly payments may decrease, leading to potential savings over time.
Flexible Terms: ARMs are available with various initial fixed-rate periods, such as 3, 5, 7, or 10 years, allowing you to choose the option that best suits your financial goals.
Adjustable-Rate Mortgage Terms:
Loan Amount: Varies based on location and property type, with limits set by the lender.
Loan Term: Typically 15 to 30 years, with options for shorter or longer terms.
Interest Rate: Competitive initial fixed rates followed by adjustable rates based on market conditions.
Eligibility Requirements: Proof of income, credit history, and ability to repay the loan.
Additional Costs: Appraisal fees, closing costs, and other associated expenses
Flexible and cost-effective option for financing a home with its lower initial interest rate and the potential for monthly payments to adjust with market conditions.”
