Adjustable Rate Mortgages
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Adjustable Rate Mortgages - When considering an adjustable rate mortgage, what may appear affordable now, may become financial disaster later. Before signing, make sure you understand when your adjustment is going to happen and whether or not you will be able to afford it when it does.
An adjustable rate mortgage, commonly known as an ARM is typically used for those borowers who have had a bruised credit situation and are needing a 2-3 year loan while they repair their credit issues.
ARMs are never meant to be used as long term loans. Those who know they will be obtaining a new mortgage prior to the adjustment date will benefit from the lower interest rate an ARM can give. An ARM can be beneficial for someone who is planning to relocate or who's property is in a transition state.
While a lot has been written in the press about the need to move to 30 year fixed mortgages, statistical analysis of historical differences between adjustable and fixed rate mortgages does bear out that ARM type mortgages, when utilized properly, unilaterally beat out 30 year fixed mortgages in terms of interest paid over a 30 year period.
ARM products come in many shapes and sizes, and many offer fixed rates for 10 or even 15 years, along with inexpensive interest only and even lower minimum payment options. In fact, the ARM type mortgage has been the loan of choice for wealthy, high net worth individuals for years, because it allows them to maximize their cashflow over the short term and take advantage of frequent changes in short term interest rates.
A commonly used Adjustable Rate Mortgage (ARM) is a hybrid of a Fixed Rate Mortgage (FRM) and the traditional Adjustable Rate Mortgage. These type of ARM has an initial fixed rate period of 2, 3 or 5 years. Thereafter the mortgage loans become an ARM and have adjustable rates for the remainder of the loan term.
Adjustable Rate Mortgages can serve a purpose only if you plan on selling the home before the adjustment period ends. Unfortunately, a lot of mortgage brokers sell Adjustable rate mortgages to people that plan on being in a home for longer periods of time. This can be very dangerous. Adjustable rate mortgages can and will go up. Most of the time they go up by the maximum allowed. This could mean that on the anniversary of your mortgage, your rate can go up by as much as 2%
Considering the fact that most American homeowners sell or refinance their home every 4-5 years is a good reason to possibly consider an ARM loan. An ARM loan can provide an optimal interest rate and a low payment for a loan that you will probably not be in for a long term. There are many different factors that need to be weighed though when considering an ARM loan. Some of these factors will be: Is this home just a starter home or where you want to remain for the next decade+? What is the stater rate on the ARM, what is the index and what is the margin (these are all very important facts to ask and find out about)? What are the caps on the ARM loan (in other words, what is the most the rate can go up or down each adjustment period and over the life of the loan)? What are the differences between the ARM rate now and the fixed rate now (sometimes the difference in rate may be so minimal that it makes more sense to just go with the fixed rate)?
How does an adjustable rate work? - Understanding how an adjustable rate mortgage (ARM) works can help you when shopping for a mortgage. The basic components of an ARM are the INDEX, MARGIN and RATE. In addition to those things, you also need to uderstand the yearly and life of the loan CAPS. By knowing how your ARM adjusts, when it adjusts and how much it adjusts can help you better shop for the loan that best fits your needs.
Typically, an ARM will have a fixed period for 2 or 3 years, then will adjust after that.
The portion of your ARM that adjusts is the index. There are several indexes that adjustable rate mortgages are tied to.
Adjustable Rate Mortgages generally have 3 different caps on how much the interest rate can adjust. These caps are often given in a format such as 6/2/6.
The first number is the limit on how much the rate can adjust at the first scheduled adjustment. On a 3 year ARM, this would be at the end of 3 years.
The second number is the cap on how much the rate can adjust on any adjustment period after the initial adjustment period. ARMs usually adjust annually, every 6 months or every month.
The third number is the life of the loan limit. That is the maximum your mortgage can adjust upwards over the life of the loan.
So, 6/2/6 caps on a 3 year ARM with annual adjustment means your rate cannot adjust more than 6% at the end of 3 years, not more than 2% any year after that, and never more than 6% above the initial rate.
INDEX + MARGIN = RATE
The index floats and can go up or down in time. The margin is fixed and is part of your particular mortgage. The resulting rate is the interest rate you pay and thus floats with the index.
One of the more common indexes used for calculating an Adjustable Rate Mortgage is LIBOR. LIBOR stands for London Interbank Offered Rate and is one of the most active rates. LIBOR would be the part of your ARM rate that will adjust and go up or down at each adjustment period, therefore increasing your decreasing your rate and payment.
In addition to the more popular 2 and 3 year fixed period Adjustable Rate Mortgages, there are also ARMs that are fixed for a 5, 7 or 10 year period, and amortized over a 30 year period.
ARM Adjustable Rate Mortgage - Adjustable Rate Mortgage; a mortgage loan subject to changes in interest rates; when rates change, ARM monthly payments increase or decrease at intervals determined by the lender; the Change in monthly -payment amount, however, is usually subject to a Cap.
Whether you are purchasing or refinancing, and want to know more about what type of loan may be best for your situation, please do not hesitate to contact me.
Over time the adjustable has outperformed the fixed rates. I would like the opportunity to show you which will be best for your goals.
An ARM (Adjustable Rate mortgage) is a nice option for people who have a second home and want to have the lowest payment possible on that property for a certain period of time. ARM's also work well with investment properties to help keep the payments down so that the investor can maximize overall cash flow. There are many different types of ARM's available. There are 1,2,3,5,7, and 10 year ARM's. There are interest only ARM's also. These ARM's are fixed for a set period of time and work the same exact way as a regular ARM, however you are only required to make the interest only portion of the payment. This is a great feature for investors and for anybody who really wants to maximize their cash flow. There are ARM's that fluctuate monthly, semi-annually, and yearly. It is very important to ask questions about the type of ARM you are going to be placed into.
When financing with an Adjustable Rate Mortgage (ARM) make sure that you do not have a pre-payment penalty that is longer than the fixed period of your loan. You do not want to be in a two-year ARM and have a pre-payment penalty that lasts for three years.
If you do have a loan with a pre pay penalty ask if it is a hard or soft pre pay. A soft pre pay will allow you to sell the house with no penalty. A hard pre pay requires you to pay the penalty if you sell or refinance the mortgage before the pre pay expires. Pre pay penalties will vary in the amount required from 60 days interest to six months interest.
Whether to choose an ARM or a fixed program has less to do with which is better and a lot to do with what will fit your situation best. Make sure you talk to a mortgage professional you trust to get great advice on what is best for you.
ARMs are great loans if you plan on moving in the future. For example if you are going to move in five years a five year arm would offer a lower interest rate and save you money each month.
Because the market goes up and down over the years in cycles, and people end up refinancing their current mortgage for cash-out equity every 3 to 7 years, those who use an adjustable rate mortgage as a staple for their home financing generally pay less in the short run and the long run.
Sub prime borrowers who took out 2/28 ARMS with 100% financing may find themselves in trouble and unable to refinance their homes. Slowing property values and declining property values in some cities as well as increasingly tighter sub prime lender guidelines are all contributing to the rise in foreclosures and defaults of sub prime ARM mortgages.
The difference between rates for Adjustable Rate Mortgages (ARM) and Fixed Rate Mortgages is growing ever smaller during this economic cycle.
Most pay option arms use index's that are averaged over the past 12 months history to determin the rate (index + borrowers margin). That way, if a rate changes one month drastically, it is still averaged out over the 12 most recent months, so any changes to the borrowers indexed rate will be minimal, and even if the trends are showing that the index is doomed, it is still averaged so that gives the borrower enough time for a worst case scenario "out" to refinance in the case of a disaster.
ARMS have caps so the borrower is protected by a maximum adjustment the lender can make over the term of the loan. This information should be clearly identified in the Truth in Lending statement (TIL) which should be given with the Good Faith Estimate (GFE).
An adjustable-rate mortgage (ARM) with an initial fixed-rate period of pre-determined years, during which the borrower is may have an option to pay only the interest accrued on the loan. The interest rate then adjusts annually or bi-annually, based on the indexes such London Inter-Bank Offered Rate (LIBOR) index, and can move up or down as market conditions change.
ARM loans come with different initial fixed rate periods such as 1 2 3 or 5 year fixed. After the initial period they will start to adjust according to the index they are tied to. What's nice about ARM loans is it allows the borrower to have a lower payment initially. These type programs can be used for many reasons, one of them being for someone who won't be living in a property for an extended period of time.
When should you take an ARM mortgage vs. a traditional 30 year fixed?
Consider how long you plan on occupying the property. If it is for 10 years or more then a 30 year fixed may be the best bet when interest rates are low. However, if you plan on moving sooner then consider the extra savings you will achieve by choosing an ARM.
For example, you plan moving when your child is old enough to go to school in three years. The best financial choice would to get a 3 year or possibly a 5 year ARM. When a 30 year fixed mortgage is around 5.875% a 5 year ARM is around 5.25% and a 3 year ARM would be about 5.00%. On a $200,000 loan the monthly payments would be $1183 for a 30 year, $1104 for a 5 year ARM, and $1073 for a 3 year ARM. Times that by 3 years, 36 months, and your savings for an ARM vs. a 30 year fixed would be between $2800 - $3900. Money better spent elsewhere.
It has been shown, that home owners would have saved thousands of dollars if they had a ARM of a conventional 30 year fixed.
If you only plan on living in your home for a few more years, it might not be worth it to move from a program like a low rate ARM or an Interest Only Program to a traditional Fixed Rate loan. There may be better things to put your money towards each month that putting a few extra dollars towards the principal of your home.
Most lenders tie ARM interest rate changes to changes in an "index rate." These indexes usually go up and down with the general movement of interest rates. If the index rate moves up, so does your mortgage rate in most circumstances, and you will probably have to make higher monthly payments. On the other hand, if the index rate goes down your monthly payment may go down.
Lenders base ARM rates on a variety of indexes. Among the most common are the rates on one-, three-, or five-year Treasury securities. Another common index is the national or regional average cost of funds to savings and loan associations. A few lenders use their own cost of funds, over which--unlike other indexes--they have some control. You should ask what index will be used and how often it changes. Also ask how it has behaved in the past and where it is published.
"American consumers might benefit if lenders provided greater mortgage-product alternatives to the traditional fixed-rate mortgage,...To the degree that households are driven by fears of payment shocks, but are willing to manage their own interest-rate risks, the traditional fixed-rate mortgage may be an expensive method of financing a home."
- Alan Greenspan, the Chairman of the Federal Reserve Board at the Credit Union National Association 2004 Governmental Affairs Conference
ADJUSTABLE-RATE MORTGAGE (ARM)
A mortgage loan where the interest rate is not fixed for the entire term of the loan, and can change during the life of the loan in line with movements of an index rate.
If one or more of these situations describes you, an ARM might be a good fit:
-You plan to stay in your home for a relatively short period of time
-You want lower initial monthly payments and can handle potential payment increases in the future
-You want to qualify for a larger mortgage amount, and you expect your income to go up over time
There are many Adjustable Rate Mortgage products available today. Some ARM products have rates that adjust immediately the following month after settlement, others have an initial fixed rate period of 1, 3, 5, 7, or 10 year. ARMs that have an initial fixed interest rate period are also known as Hybrid Loans.
ARM products almost always have an initial interest rate that is lower than that of fixed rate products of the same loan term. These lower starting rates, also referred to as Teaser Rates, are meant to induce/reward borrowers who are willing to bear some of the risks of future interest rate movements.
When choosing an ARM product, it is as important to consider the underlying indices and margins as picking the lowest teaser rates. Different indices have different sensitivity to the interest market. In other words, some indices such as Treasury bills and LIBOR are highly sensitive to market conditions and adjust rapidly. The 11th District Cost of Funds Index, also known as COFI, tends to move slower in comparison and therefore less volatile.
Other ARM product features that need to be considered include the Period Adjustment Caps which limits the maximum rate change allowed at an given adjustment, the Floor, which is the lowest possible rate of the loan, regardless of the value of the underlying index, and the Life Time Cap, which sets a ceiling for the maximum rate of interest throughout the life of the loan.
An ARM, short for "adjustable rate mortgage", is a mortgage on which the interest rate is not fixed for the entire life of the loan. The rate is fixed for a period at the beginning, called the "initial rate period", but after that it may change based on movements in an interest rate index.
The ARM rate quoted by a lender or broker is the initial rate. It holds until the end of the fixed-rate period, which can last from a month to 10 years. This rate is critically important if the initial rate period lasts for 10 years, but it is very unimportant if the period is only one month.
On the most popular ARM program, the initial rate period is 12 months, and on more than half the period is 36 months or less. While you can always opt for an ARM with a longer initial rate period, the rate goes up as the period lengthens. If you need the rate on a one-year ARM to qualify, you must consider very carefully what happens after the fixed-rate period ends.
ARM's are great for keeping your payment down for a fixed period of time while you work on your FICO score and aim for a better fixed rate down the road.
Some ARM loans have an interest only option. These loans are very popular with people who do not plan on staying in the home for a long period, want to qualify for a larger home and investment properties to increase cash flow due to the lower payments.
If your ARM has started to adjust, it might be a good idea to refinance into a fixed rate loan.
An Adjustable Rate Mortgage (ARM), will carry a lower initial interest rate than a typical 30 year fixed rate mortgage. The lender is hoping that you will forget about the adjustment, and just continue to hold on to the loan. Be aware of when your loan is due to adjust, as well as by how much it will adjust.
An adjustable rate mortgage, called an ARM for short, is a mortgage with an interest rate that is linked to an economic index. The interest rate, and your payments, are periodically adjusted up or down as the index changes.
2/28 ARM is a great product. Especially for 1st time home buyer or sub prime borrower. It allows one to strengthen credit over the two year period.
Adjustable rate mortgages or ARMs have Interest Rate Caps.
Rate caps limit how much interest you can be charged over a period or over the life of a loan.
A Periodic rate cap limits the amount by which your interest rate may increase at the adjustment period(s). Only some ARMs have these period caps.
Overall or lifetime rate caps limit how much rate can change over the life of the loan. Lifetime or overall caps are required by law and have been required by law since 1987 on all Adjustable rate mortgages.
If you are considering an adjustable rate mortgage, make sure you do the research. Find out how often the rates can increase and by how much. Try to determine whether you can afford payments if the rates go up significantly over the next few years.
The initial interest rate for an ARM is lower than that of a fixed rate mortgage, where the interest rate remains the same during the life of the loan. A lower rate means lower payments, which might help you qualify for a larger loan.
There's couple of questions that is very important when considering the ARM:
How long do you plan to own the house? The possibility of rate increases isn't as much of a factor if you plan to sell the home within a few years.
Do you expect your income to increase? If so, the extra funds might cover the higher payments that result from rate increases.
Some ARMs can be converted to a fixed-rate mortgage. However, conversion fees could be high enough to take away all of the savings you saw with the initial lower rate.
If you are currently in the tail end of the fixed period in your Adjustable rate loan, often 2 years, 3 years or 5 years after you took it out, this may be the best time to get a fixed rate mortgage refinance and lock in your rate while it is low. While mortgage rates rise and fall, the current market outlook is that they will continue to increase over the next couple of years, and you don't want to be stuck paying a lot more money for a couple of years when you have the opportunity to refinance ARM into fixed rate mortgage today.
For most folks a 30 year mortgage is overkill. They will refinance again inside of the next 5 years. Why take such a higher rate for a 30 year mortgage if you're going to refinance? Adjustable Rate Mortgages allow you the flexibility you deserve when taking a loan.
In addition to caps, which limit how high the interest or payment can adjust, most ARM mortgage loans have floors, which limit how low the interest rate can go.
Adjustable Rate Mortgage (ARM) - "While shopping for a mortgage, I keep hearing the word ARM. What is an ARM and why would I need one?"
There are more risks associated with adjustable rate mortgages. Payments on an adjustable rate mortgage can possibly increase over time due to increasing rates.
An Adjustable rate mortgage is a mortgage type that allows a person to have a lower interest rate at the beginning of the loan, and after a specified time, the rate will adjust based on the type of mortgage loan it is.
If you are concerned with mortgage payments rising on an ARM Adjustable Rate Mortgage, there is no better time than the present to do something about it. Fixed rate mortgages are available with surprisingly low payments, some even with "cash flow" minimum payment options, allowing you to preserve the payment flexibility of an Option ARM and obtain the security of a fixed rate for up to 30 years. For more information, please email us at Fixed@RefinanceOne.net and please be sure to mention which State your property is located in, how much you owe on your current mortgage, and how much you believe your home is worth so we can better assist you in evaluating your fixed rate mortgage options.
2/28 Adjustable Rate Mortgage - A 2/28 arm is a mortgage that has a fixed rate for the first two years, and then the interest rate adjusts for the next 28 years. This completes the full 30 year term of the loan.
These types of mortgages help make the payment lower than a traditional 30 year fixed. You will want to make sure you understand the cap limits and margin so that you are prepared for the first adjustment. Your fully adjusted rate will be the current index plus the margin which was set at the closing of your loan.
The 2/28 is used quite often as a "band-aid", or 2 step type of loan. What is meant by this is, many people who are put on a 2/28, are put on the loan as a temporary thing with the intention of refinancing in the next 2 years. These types of loans are used quite often by sub-prime lenders to get borrowers into a home at a lower rate and payment upfront for the first 2 years, and then once a borrower has had a chance to establish more credit or repair their credit they can look into qualifying for a mortgage with a great fixed rate.
Because the initial interest rate of a 2/28 is often lower than a 30-Year Fixed Rate Mortgage (FRM), many property investors who look to sell the house within the next years usually prefer the 2/28 ARM. These types of home buyers often know that they would not keep the mortgages beyond the 2-year fixed rate periods.
When you are purchasing a home, the 2/28 is often times used as an 80/20. The 2 year ARM is the 80%, and the 20% is often times a 15 year fixed with a 30 year amortization (balloon payment). The 2/28 is great for 100% purchase transactions.
Verify the pre-payment penalty term when closing.
2/28 ARMS will have a ceiling rate that is often times upwards of 13%. This means that your rate could potentially go as high as the ceiling rate over time if you do not refinance out of the mortgage.
Some lenders will offer the broker a rebate if the prepay is longer then the 2 year term. Make sure you work with an honest mortgage professional.
The 2/28 loan is what they call a hybrid mortgage. It's a combination of the fixed rate and adjustable rate mortgages.
Make sure that you do not have a 2/28 ARM with a 3-year pre-payment penalty. You will have to pay the prepayment penalty if you want to refinance after the 2-year fixed interest period.
The 2/28 ARM is considered a temporary loan and is very commonly offered by the subprime mortgage lenders. If you have never owned a home before, and your credit is less than perfect, the 2/28 ARM might be your only choice to get you out of the renting rat race and into a home. Most people refinance out of the 2/28 ARM after the end of the 2 years into a better low mortgage rate loan.
Refinance Out of An Adjustable With A Fixed - Everywhere you look, economists believe rising interest rates are imminent. According to popular believes, when Adjustable Rate Mortgages (ARM) start to adjust, the new interest rates will be significantly higher, thereby putting unprepared homeowners, who have been accustomed to the low payments of ARMs, at risk of default and eventually foreclosure. If a homeowner with an Adjustable subscribes to this outlook, it is time to refinance out of the ARM and get into a Fixed Rate Mortgage (FRM), while long term rates are still historically low.
Typically, adjustable rate mortgage can adjust from 2-5% on their first adjustment. Check with your mortgage service provider to see how your mortgage will adjust, and when it will adjust.
To really understand you adjustable rate mortgage, you need to know two things, the index and the margin. The index is the adjustable component can be one of several indices. The most common index used is the 6 month LIBOR. Indices move up or down based on numerous economic factors. The margin is the fixed component of the adjustable and does not move. When you adjustable rate mortgage adjusts it's when the index and the libor added together are greater than your current rate.
When you have an adjustable rate mortgage at some point it will adjust. When your loan is a few months away from adjusting, it's a good idea to look into refinancing your loan to a fixed rate. When refinancing to a new loan look into all the options. Going with a 25, 20, or 15 year term might be better option rather than a 30 year if you are able to afford the monthly payment.
If you have an adjustable rate mortgage and you are considering refinancing into a fixed rate to get out of the adjustable you need to consider your short term and long term goals. If you plan on moving from the home within the next few years refinancing into another Adjustable Rate Mortgage (ARM), might be the best option. However, if you have no intention of ever moving then a fixed rate mortgage may be the best option for you. Therefore consider all options before jumping into a new mortgage.
If you want to know the details of how and when your ARM will adjust read through your mortgage Note. The Note is one of the many documents you signed at closing and you should have a copy of. The Note will describe when your rate can adjust, and how the adjustment is calculated, and what the adjustment caps are.
Here in early 2006 financial markets are experiencing a phenomenon known as the inverted yield curve. In a nutshell, that means that interest yields on long term investments like bonds are actually lower than those paid for shorter term ones. What this means for the mortgage market is that long term fixed rate loans are actually priced lower than the ones that have only a short fixed rate period and then convert to an ARM. During periods of inverted yield curves it is a great time for many borrowers to refinance out of their ARM mortgages into long term fixed rate ones.
Along with the security of a fixed interest rate you may also be able to take cash out of your home's equity in the same transaction. It's best to do this at the same time you refinance your adjustable rate mortgage to keep from having to pay closing costs again later. Ask your preferred mortgage professional if your home has grown in value and if a cash-out refinance is right for you.
Many people take adjustable rate mortgages because credit challenges initially prevented them from having a low fixed rate. If you have made all of your mortgage payments on time and your credit score has increased you may be able to refinance into a Fixed Rate Mortgage without increasing your payments.
If you plan to live in your house for the maturity of the loan (30 years) than refinancing out of an ARM to a fixed is a good solution. However, if you plan to move in the next few years another ARM for a fixed period of time will help save money on your monthly payment.
If your ARM Adjustable Rate Mortgage is nearing the end of its fixed period, it is easy to make the argument to refinance into a fixed rate. With rates on adjustable rate mortgages rising rapidly, and often dramatically, the payment on a 30 year fixed rate has never looked so good by comparison. Consider how much your ARM payment will be when the rate adjusts (often by 3, 5 or even 6% more than your introductory start or "teaser" rate). If you're like the grand majority of people who took out an adjustable rate mortgage in the past 5 years, your payments may as much as double. That fixed rate doesn't look so expensive now does it? Even if you are in an Option ARM loan and love the minimum payment option, there are fixed rate mortgages available which cater to your needs, offering both Cash Flow minimum payments and fixed rates for 5, 10 or even 30 years fixed.
If you are considering refinancing out of an ARM, it is a good idea to contact a mortgage loan specialist two months before the rate is set to adjust. This will give him enough time to process the application for your new fixed rate mortgage.
All ARM mortgages have a rate ceiling. This ceiling can be as high as 14%. This means that the interest rate on your mortgage can keep increasing until it hits the ceiling rate. A mortgage with a rate this high would push most home owners into default in a short period of time.
3/27 Adjustable Rate Mortgage - A 3/27 ARM is a mortgage that is initially a fixed rate (for the first 3 years), and then adjusts for the next 27 years. During the 3 year fixed period, the rate will not change, and neither will your monthly payments.
The 3/27 mortgage gives you a longer period of fixed payments but comes with a slightly higher rate than a 2/28 arm would.
The 3/27 ARM, or adjustable rate mortgage is a home loan that is fixed for the first 36 months and then it becomes adjustable thereafter. After the initial fixed rate period of 3 years the rate will adjust usually every 6 months, semi-annually, or every 12 months, annually. The 3/27 will have some rate caps meaning that the rate cannot go any higher than a certain amount and any lower than a certain amount but you will need to check with your mortgage professional to find this information out beforehand.
Many home buyer with bad credit history use 3/28 ARM's, with the intention of repairing their credit profiles before the three years fixed rate period is up and refinance to a permanent mortgage with a lower interest rate.
The 3/27, like all ARMs, still is amortized over the full 30 years. Which means your payments are figured by using the full 30 year term. Many consumers have a tendency to get this confused. It is basically the same as a 30 year fixed, for the first 3 years, and then it will adjust.
A 3/27 ARM is usally .1-.25% higher then a 2/28 ARM. IF you intend to refinance within 2 years you may be better off with a 2/28 ARM and the lowr payment it carries.
The 3/27 ARM often has a prepayment penalty associated with it. If you think you may be in a position to pay the loan off sooner, you may want to negotiate a shorter prepay or consider a 2/28.
(ARM) Adjustable Rate Mortgage - An Adjustable Rate Mortgage is a loan in which the interest rate varies at predetermined intervals in step with the movements of an agreed upon external index rate for some portion of the life of the loan.
A mortgage in which the interest periodically "adjusts", according to various fluctuations in an index. All ARMs are tied to indexes. Common indexes are T-Bill, MTA, COFI, COSI, CODI, & LIBOR.
It will be in your best interest to refinance the ARM before it begins to adjust. Although there areinterest rate caps on the amount of the first rate adjustment, once the ARM begins to adjust your payent will more then likely increase.
Adjustable rate mortgages often have lower initial interest rates and payments.
Today's Adjustables lock in lower rates for longer than ever before, so you can fix that low initial interest rate for 5 years or more.
For customers who plan on living in their home for less than 5 to 7 years, adjustable rate mortgages, particularly fixed/adjustable hybrids are often an excellent option.
Adjustable Rate Mortgages or ARM mortgages are an excellent choice for your first home purchase, for growing families, and for building up credit.
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