You might be looking to buy or refinance a home, but need a lower payment than what a 15 Year Fixed Rate Mortgage or 30 Year Fixed Rate Loan offers, consider an adjustable rate mortgage (ARM). If you often relocate for work or are planning on expanding your family in the next few years, an adjustable loan might be a better fit for you than a traditional fixed rate mortgage.
With an adjustable rate mortgage, you have the flexibility of a lower rate and payment for a fixed term of 3, 5, 7 or 10 years. Adjustable Rate Mortgages (ARMs) typically offer lower initial interest rates than Fixed Rate Mortgages. These adjustable mortgage loans allow you to keep your payments low and save money. Since the initial interest rate on adjustable mortgages remains fixed over an introductory period of time, typically ranging from 3 to 10 years you can plan accordingly. After the introductory period ends, your Adjustable Rate Mortgage will change depending on the current index.
How can you tell if an Adjustable Rate Loan is right for you? An Adjustable Rate Mortgage is typically beneficial for:
- Borrowers who need to keep their interest rate and payment low
- Borrowers who often relocate every few years because of their career
- Real estate investors who need investment property loans to purchase properties, renovate them, and resell the property after a few years
- Growing families looking who may need a loan to buy larger home in the future
If you are interested in learning more about whether an Adjustable Rate Loan will best suit your needs, talk to a loan professional. A licensed mortgage specialist can help you determine which loan option will best meet your needs.