Is an adjustable rate mortgage right for you?
An adjustable rate mortgage, also called an ARM or variable rate mortgage, is a type of mortgage loan that begins with a low introductory interest rate for a certain period of time, usually 5 to 7 years. During that time, the interest rate and the mortgage payment are fixed and cannot change. But after that initial period, the interest rate may be adjusted up or down depending on the terms of the loan and the market movement on which the adjustable rate mortgage is based. In a 3 year ARM, for example, the rate will be fixed for the first three years and then adjusted annually every year after.
An adjustable rate mortgage may offer initial or introductory rates that are lower than a fixed rate mortgage. This can be particularly helpful if you’re trying to get the most from your monthly budget, or if you’re planning to move within a few years before the introductory period ends and the interest rate is adjusted. An adjustable rate mortgage may also be a good option when you anticipate that interest rates are likely to go down in the future.
When you want help to determine if an adjustable rate mortgage is right for you, a Mortgage Loan Originator at eLEND can create a Custom Rate Quote for your specific financial situation.