What is an ARM loans or Adjustable Rate Mortgages?
So you wanna get into a home now but are worried about the high mortgage interest rates well, I have an option for you.
ARM loans or Adjustable Rate Mortgages have been around for a while now and with the current interest rates as high as they are, many home buyers are looking for alternative ways to finance their homes.
An ARM loan can be a great way to get into a home now while still getting a lower interest rate than a 30-year fixed mortgage. The interest rate on an ARM loan is fixed for a certain period of time, usually 5, 7, or 10 years, and then after that, it will adjust annually based on the current market conditions.
This can be beneficial to home buyers because they can take advantage of the current low-interest rates now and then when the rates go up, their monthly payment will not increase as much as it would with a 30-year fixed mortgage.
Another benefit of an ARM loan is that it can allow home buyers to qualify for a higher loan amount than they would with a 30-year fixed mortgage.
This is because the monthly payment is based on the initial interest rate which is lower than the current market rates. So if you are looking to purchase a home now, an ARM loan may be a better option for you than a 30-year fixed mortgage.