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Adjustable Rate
Mortgage (ARM)
What's the advantage to an ARM loan? The benefits
vary depending on the borrower's needs. If the borrower
only intends to be in a home for a short period of time
(1-5 years), then an ARM might be a good fit. If the
borrower has credit problems, an ARM might work until
the borrower's credit is improved and a conventional
loan can be refinanced. An ARM is also good if fixed
rates are high. Adjustable Rate Mortgages can offer
lower payments. Apply Today for
an Adjustable Rate Mortgage and SAVE!
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What are the
disadvantages to an ARM loan? The scary thing about
ARM loans is that the borrower is at the mercy of the
market. If rates go up, then your ARM payment will go
up. You will not have anything fixed and it could get
out of your budget. Apply Today
for an Adjustable Rate Mortgage and SAVE!
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Should You Get an Adjustable
Rate Mortgage (ARM) Loan? As with any mortgage
product, but especially an ARM, we recommend that you
speak to a mortgage professional and weigh the pros and
cons of an ARM versus a fixed rate mortgage loan.
Click here and complete our form
to have mortgage professionals contact you to discuss
the options available.
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What is a 10/1 Adjustable Rate
Mortgage Loan? The first number is the length of the
initial period - how long it is until the first interest
rate adjustment. For example, the interest rate on a
10/1 ARM will not change for the first 10 years but can
change in the 11th year. People often plan to sell or
refinance their home before the end of the initial
period. Apply Today for a 10/1
ARM and SAVE!
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What is a 7/1 Adjustable Rate
Mortgage Loan? The first number is the length of the
initial period - how long it is until the first interest
rate adjustment. For example, the interest rate on a 7/1
ARM will not change for the first 7 years but can change
in the 8th year. People often plan to sell or refinance
their home before the end of the initial period.
Apply Today for a 7/1 ARM and
SAVE!
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What is a 5/1 Adjustable Rate
Mortgage Loan? The first number is the length of the
initial period - how long it is until the first interest
rate adjustment. For example, the interest rate on a 5/1
ARM will not change for the first 5 years but can change
in the 6th year. People often plan to sell or refinance
their home before the end of the initial period.
Apply Today for a 5/1 ARM and
SAVE!
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What is a 3/1 Adjustable Rate
Mortgage Loan? The first number is the length of the
initial period - how long it is until the first interest
rate adjustment. For example, the interest rate on a 3/1
ARM will not change for the first 3 years but can change
in the 4th year. People often plan to sell or refinance
their home before the end of the initial period.
Apply Today for a 3/1 ARM and
SAVE!
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What is a 1/1 Adjustable Rate
Mortgage Loan? The first number is the length of the
initial period - how long it is until the first interest
rate adjustment. For example, the interest rate on a 1/1
ARM will not change for the first year but can change in
the 2nd year. People often plan to sell or refinance
their home before the end of the initial period.
Apply Today for a 1/1 ARM and
SAVE!
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What is a 2/28 Adjustable Rate
Mortgage? This program is a 30 year adjustable
program, except that the first adjustment does not occur
until 2 years into the loan. At this point, adjustments
are typically made every 6 months. Ask your lender about
the frequency of adjustments, since some 2/28 loans
adjust every year. Apply Today
for a 2/28 ARM and SAVE!
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What is a 3/27 Adjustable Rate
Mortgage? This program is a 30 year adjustable
program, except that the first adjustment does not occur
until 3 years into the loan. At this point, adjustments
are typically made every 6 months. Ask your lender about
the frequency of adjustments, since some 3/27 loans
adjust every year. Apply Today
for a 3/27 ARM and SAVE!
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What is a 1 Year Adjustable Rate
Mortgage? This is a 30 year loan in which the rate
(and therefore your monthly payment) changes every 12
months on the anniversary of your loan. The amount of
the rate change (referred to as an Adjustment), is
determined by a mathematical formula based on the U.S.
bond market (most typically the yield on the 1 Year U.S.
Treasury Bill). Your lender does not control this
number, so it is safe to assume that your adjustment
will be fairly determined (though you should always
verify your new rate by comparing with published
numbers).
This loan is considered quite risky since your payment
may change significantly from year to year. In exchange
for taking this risk, the borrower is rewarded with an
initial rate that is significantly below market rates
for 30 Year Fixed Rate Mortgages. Even after the loan
adjusts, your new rates will typically be below those
rates being offered to new borrowers for the 30 Year
Fixed Rate program. In periods of rising interest rates,
it is very possible that you will ultimately pay much
more for a 1 Year Adjustable than a 30 Year Fixed Rate
Mortgage. Apply Today for a
one-year ARM and SAVE!
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What is a 3 year Adjustable Rate
Mortgage? This is a 30 year loan in which the rate
(and therefore your monthly payment) changes every 3
years. Like the 1 Year Adjustable Rate Mortgage, your
new rate is calculated based on a predetermined formula.
This loan, while risky, is safer than the 1 Year
Adjustable Rate Mortgage only because it does not adjust
as frequently. Apply Now!
This loan is right for you if:
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What is a 5 Year Adjustable Rate
Mortgage? This is a 30 year loan in which the rate
(and therefore your monthly payment) changes every 5
years. This loan is a nice compromise between shorter
term Adjustable Rate Mortgages and Fixed Rate programs.
Apply Today for a five-year ARM
and SAVE!
This loan is right for you if:
-
You expect to stay in
your current home beyond the initial five years
-
You still wish to keep
your payments relatively low and you are willing to
accept a small amount of interest rate risk in
exchange for this benefit.
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What is an Option Adjustable
Rate Mortgage (ARM)? The Option Arm has a start rate
as low as 1.25%. It is an adjustable rate mortgage based
on either of two indexes. It is a loan program that
provides both stability and flexibility. The stability
is from the fact that the indexes are based on a 12
month rolling average or weighted average.
The flexibility gives you
four payment options every month (minimum, interest
only, principal and interest based on a 30yr schedule or
principal and interest based on a 15yr schedule). The
index is the part that adjusts every month. Your margin
is added to the index every month to determine your
rate.
The margin will remain fixed
over the life of the loan. The program also has caps.
Your minimum payment has an annual cap of 7.5%. There is
a deferment cap of 125% and there is a lifetime cap of
8.95%. There is also a recast every five years.
Apply Today for an Option ARM and
SAVE!
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