Is an ARM Right for You?
ARM (Adjustable rate mortgage) loans start with an introductory interest rate for the first 5 to 10 years. After that, it adjusts annually to reflect current interest rates.
ARMs at a Glance:
- Lower initial interest rates and monthly payments for the first 5-10 years of the loan
- Rates adjust after the initial period to reflect current rates
- Payments after the initial period fluctuate annually depending on the federal rates and may increase substantially
- ARMs are a great option for homeowners who don’t plan on living in the home for more than a few years or beyond the initial fixed-rate period.
- Lower initial rates leave more money in your wallet due to lower mortgage payments, leaving you extra wiggle room to save money for the future.