ARM Adjustable Rate Mortgage Loan Types For Real Estate Buyers
The defining factor of an Adjustable Rate Mortgage (ARM) is that the monthly payments can increase or decrease according to the interest rate it’s associated with.
Fixed rate periods are generally offered in a few different ways and one should consider which option will work best for their own current financial situation. Check out a few of the very common options for this mortgage type below:
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10/1 ARM
Fixed for 120 months then, adjustments are made annually for the remaining duration of the loan.
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7/1 ARM
Fixed for 84 months then, adjustments are made annually for the remaining duration of the loan.
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5/1 ARM
Fixed for 60 months then, adjustments are made annually for the remaining duration of the loan.
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3/1 ARM
Fixed for 36 months then, adjustments are made annually for the remaining duration of the loan.
The leading number in each Adjustable Mortgage Rate Type will be the number of years that the introductory rate offered will last until the interest rate and monthly payments associated with it go up and down. For further explanation, real estate buyers should contact their preferred lender to help walk through each option and clarify any questions that may arise. Purchasing real estate property is a major financial purchase and all options should be taken into consideration to determine which to select before submitting any offer. This absolutely will make the buying process much smoother, not to mention, less stressful for all parties involved!