Fixed and Adjustable Rate Loans
Fixed Rate Mortgage
An adjustable-rate mortgage (ARM) is a type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan. With adjustable-rate mortgage caps, there are limits set on how much the interest rates and/or payments can rise per year or over the lifetime of the loan. ARM loans typically feature lower rates and monthly payments than comparable fixed-rate loans during the initial rate period, but rates could increase or decrease once the initial rate expires. While many home buyers prefer the security of a fixed-rate mortgage, an ARM can be a good choice, too-especially if you know you’ll be moving within the next few years.
- Monthly principal payment will not change
- Allows for long-term financial planning
- Choice of loan terms ranging from 10- 30-year options
Adjustable Rate Mortgage (ARM)
An adjustable rate mortgage (ARM) is a loan in which your interest rate may change over time. The interest rate is periodically adjusted based on an identified index, meaning your monthly payment could increase or decrease. Often, ARM loans provide a lower initial rate compared to fixed rate mortgages.
- Typically allows a lower initial interest rate and payment
- Flexibility for buyers who plan to move in the future or who anticipate their income increasing
- Various term options:
- 5/6 Arm 6-month SOFR
- 7/6 Arm 6-month SOFR
- 10/6 Arm 6-Month SOFR*Secured Overnight Financing Rate (SOFR)
Call a loan professional to help at (855) 231-3700.