Adjustable Rates Loans
The home buying process can be daunting to navigate, especially for first-time buyers or single families. As you work towards eventual homeownership, you will need to determine which type of loan will be best for you and your family. In this article, we will discuss Adjustable-Rate Mortgage loans (or ARM loans for short), what kind of homebuyers they are best for, common FAQs, and what other things you’ll need to evaluate if you are considering an ARM loan.
Don’t forget, this process can be a little challenging. That’s okay though, because Delmar Mortgage remains committed to doing Right by You. We will always act and make recommendations with your best interests in mind, so that you and your family can finally own your dream home. If you have questions about anything you read in this article, schedule a consultation with one of our loan officers today!
What is an Adjustable-Rate Mortgage?
An adjustable-rate mortgage, or ARM, is a type of home loan that has an interest rate which changes or adjusts based on the market and its performance over a period of time. ARMs tend to start off with a lower interest rate than something like fixed-rate mortgages, making ARMs a strong option for those with a financial goal of paying the lowest mortgage rate possible as they from the start.
It is important to note though that this particular interest rate doesn’t last forever. Following the initial period negotiated in the home buying process with your lender, the monthly payment you are expected to pay throughout your loan term will begin to vary depending on the market. This can be challenging as you try to forecast your monthly budget. If you spend a little time reviewing and understanding the terms in your ARM loan, you can feel more prepared for when/if your payment goes up over time because of rate adjustments.
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