If you need a lower monthly mortgage payment to start with (you’re a first-time home buyer, for example, or you expect your income to increase over time), an adjustable-rate mortgage can be a great choice.
What is an Adjustable ARM Mortgage?
With an adjustable-rate mortgage, there is an initial loan period where you pay a fixed rate. Then the interest rate changes periodically throughout the remainder of the loan. The interest rate change depends on how the market has fluctuated at that time.
How Does an Adjustable ARM Mortgage Work?
Typically, there is an initial fixed-rate period of 5 to 10 years. The interest rate may adjust each year after that through the end of the loan term. A 5-year or 10-year ARM offers a lower mortgage rate than a traditional 30-year fixed loan. Adjustable-rate mortgages are a great option for those who plan on selling or refinancing their home before the five or ten years are up.
How Long Does an Adjustable ARM Mortgage Last?
An adjustable-rate mortgage lasts for the entire length of your loan. The initial rate and payment amount on an ARM are in effect for a month to five years or more, depending on your terms.
Types of Adjustable ARM Mortgage Loans
5/1 ARM - Fixed rate for the first 5 years. Adjusts annually for the remaining years.
10/1 ARM - Fixed rate for the first 10 years. Adjusts annually for the remaining years.
5/6 ARM - Fixed rate for the first 5 years. Adjusts every 6 months for the remaining years.
7/6 ARM - Fixed rate for the first 7 years. Adjusts every 6 months for the remaining years.
10/6 ARM - Fixed rate for the first 10 years. Adjusts every 6 months for the remaining years.
Here’s Why We Do What We Do
We recently refinanced our mortgage with Right Start. Both Allen Rodriguez and David Williamson were amazing. They were patient with all of my questions. They also explained the entire process and where we were in the process. Both called to congratulate me when our loan funded. I felt they actually valued my business. Thank you! I would highly recommend Right Start.
We would like to thank Jeff Aguilera for the time and knowledge he provided my wife and I with a very smooth transition in the purchasing of our house. Our real estate agent Emily suggested we go with Jeff and he did not disappoint. So thank you very much, again Jeff. It was a true pleasure working with you.
I highly recommend Right Start mortgage and David Leverage. The communication was fast and efficient from day one. I love the ability to do most of the paperwork online. I contacted other lenders prior to getting referred to David and never received a call back. David started my paperwork the next day. Great service and great people.
Why Right Start Is the Right Choice
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