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Key Highlights
The Benefits
Lower Initial Payments
Enjoy a reduced starting payment.
Increased Buying Power
Lower payments may increase affordability.
Multiple Term Options
Choose the ARM that fits.
What's Required
Credit Qualification
Standard credit guidelines apply.
Financial Documentation
Income and assets must be verified.
Future Rate Adjustments
Rates may change over time.
The Ins & Outs
How it Works
An Adjustable-Rate Mortgage (ARM) offers a lower initial interest rate for a fixed period before the rate adjusts periodically based on market conditions. This option can help reduce monthly payments during the introductory period and may be a smart solution for borrowers who plan to move, refinance, or pay off their loan before future adjustments occur.
ARM loans are available with a variety of mortgage programs for primary residences, second homes, and investment properties.
Example Scenario
A borrower plans to own a home for five to seven years before relocating. Choosing a 5/1 ARM provides a lower initial interest rate and monthly payment during the time they expect to own the property.
What is an ARM loan?
An Adjustable-Rate Mortgage (ARM) has an initial fixed interest rate for a set period before adjusting periodically based on market conditions.
Are ARM loans a good option?
ARM loans can be a great fit for borrowers who expect to move, refinance, or pay off their loan before the initial fixed-rate period ends.
How often does the interest rate change?
Adjustment frequency depends on the loan program. Common options include 5/1, 7/1, and 10/1 ARMs.
Can my monthly payment increase?
Yes. Once the initial fixed-rate period ends, your interest rate and monthly payment may increase or decrease based on the loan's adjustment terms.
Can I refinance an ARM?
Yes. Many borrowers choose to refinance into another mortgage before or after the adjustment period, depending on their financial goals.
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