In the past, if your goal is to lower your monthly payment and you intend on keeping your home for less than 10 years you may want to consider an adjustable rate mortgage. With an adjustable rate mortgage you could lower your monthly payments by obtaining a lower initial interest rate then those associated with traditional fixed rate mortgages.

Most adjustable rate mortgages don’t start adjusting from day one. Typically ARM’s will be fixed for an initial period before they adjust. Initial fixed periods for ARM’s range from 1 – 10yrs, You can determine the amount of time an ARM product is fixed by the way it is labeled, for example a 3/1 ARM is fixed for 3 years and a 5/1 ARM is fixed for 5yrs and so on and so forth. The number that follows the number of years the loan is fixed designates the frequency the loan will adjust after the fixed period has expired. For example a 3/1 ARM is fixed for three years and will adjust once each year thereafter and a 3/6 ARM is fixed for three years and will adjust once every six months thereafter.

Given the current state of the real estate market their are only limited circumstances where ARM's make sense. We recommend fixed rate products. If you feel your situation may offer a benefit or would like inquire whether or not this type of loan would make more sense please call us at 866-606-4334.