An adjustable rate mortgage (ARM) can offer a homeowner a way to save money on their loan in the short term, with a variety of payment options in the future. ARMs offer a great deal of flexibility to borrowers. An ARM loan has an initial fixed rate for a period of time, then the rate becomes adjustable. Most rates themselves will be tied to indexes like the London Interbank Offered Rate (LIBOR).
The decision to go with a variable rate mortgage or one with a fixed interest rate will depend upon your personal situation.
Adjustable Rate Mortgage (ARM) rates are initially fixed for a period of time that you choose.
The initial payments during the fixed portion of the loan are usually lower than a comparable fixed rate loan.
If you aren’t planning to stay in your home for a long time, the variety of adjustment periods offers flexibility and potentially lower costs to borrowers.
An adjustable ARM has a cap on the amount that the interest can rise in any adjustment period.
The money saved on the initial payments can be invested for other purposes.
In periods of falling interest rates, borrowers can take advantage without having to refinance their mortgage.
Adjustable Rate Mortgage
Sunrise Mortgage Group provides you with the tools you need to make the right borrowing decisions. These calculators may borrowers in determining different values in the loan process. Try to ensure the information you enter is as accurate as possible.
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