Homeowner working on finances. Researching adjustable rate mortgages.What are Adjustable Rate Mortgages & How Do They Work?

Adjustable rate mortgages, often referred to as “arms”, may have a fixed period of time where the rate is lower than traditional 15 - 40 year fixed rate products. Upon completion of the initial fixed-rate period, the rate begins to adjust up or down based upon the value of an assigned index. Thus, if you are looking for a low initial payment and only plan to be in a home for ten years or less, an adjustable rate mortgage might be a good decision. Ask your AAXA loan advisor if a 5 year adjustable rate mortgage, 3 year ARM, or any other adjustable rate loan product might be right for you.

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or call us toll free at 877-RATE-LOW (877-728-3569) for a consultation. .


Advantages vs. Disadvantages – Adjustable Rate Mortgage Information

It is very important to research adjustable rate mortgage information and weigh the pros and cons. Although you save money by locking in on a lower rate initially, you have to weigh the risk of a potential hike in interest rates. It is a matter of individual risk tolerance. Typically, the shorter the fixed period of an arm, the lower the rate. For example, the starting rate for a 5 year ARM mortgage may be slightly higher than a 3/1 adjustable rate mortgage. AAXA works with lenders that offer loans from 2 year arms to up to 10 year arms.

You may want to ask yourself a few questions before pursuing an adjustable rate loan:
  • How long do I plan to be in the home?
  • Will I be able to cover higher payments if the rate increases?
  • How much will I save with an ARM? How could those savings help me and my family with other needs?
  • Could an adjustable rate mortgage help me afford a more expensive home and do I believe that my future income will cover the risk of future adjustments in rate?
  • Is taking out a adjustable rate mortgage in a declining market a good idea?

To learn more about Adjustable Rate Mortgages, call 877-RATE-LOW (877-728-3569)

Products that you may want to research:

10 Year Adjustable Rate Mortgage
7 Year Adjustable Rate Mortgage
5 Year Adjustable Rate Mortgage
3 Year Adjustable Rate Mortgage
2 Year Adjustable Rate Mortgage
1 Year Adjustable Rate Mortgage
1 and 2 Year Jumbo ARM
Convertible ARMs - free fixed rate conversion for first 60 months
30 year mortgage interest only
3 year interest only loan
5 year interest only mortgage loan
10 year and 7 year interest only mortgage

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