Adjustable Rate Mortgage (ARM) - "While shopping for a mortgage, I keep hearing the word ARM. What is an ARM and why would I need one?"

There are more risks associated with adjustable rate mortgages. Payments on an adjustable rate mortgage can possibly increase over time due to increasing rates.

An Adjustable rate mortgage is a mortgage type that allows a person to have a lower interest rate at the beginning of the loan, and after a specified time, the rate will adjust based on the type of mortgage loan it is.

If you are concerned with mortgage payments rising on an ARM Adjustable Rate Mortgage, there is no better time than the present to do something about it. Fixed rate mortgages are available with surprisingly low payments, some even with "cash flow" minimum payment options, allowing you to preserve the payment flexibility of an Option ARM and obtain the security of a fixed rate for up to 30 years. For more information, please email us at and please be sure to mention which State your property is located in, how much you owe on your current mortgage, and how much you believe your home is worth so we can better assist you in evaluating your fixed rate mortgage options.

Why Should I Get An Adjustable Rate Mortgage? - Many borrowers are given an adjustable rate mortgage (ARM) but often times this type of mortgage may not be right for them. The interest rates on Adjustable rate mortgages fluctuate depending on which index is being used to calculate the rate. The typical adjustable rate mortgage (ARM)often have fixed periods of 2 to 5 years where the rate stays the same. However, after these fixed periods the rate may jump substantially. Borrowers should only get into an ARM after thinking it over very carefully.

If you know that you will be living in the subject home for a long time, an Adjustable Rate Mortgage (ARM) is usually not a good option. Fixed Rate Mortgages (FRM) are often better for home buyers who will be keeping the mortgage for most part of the loan term.

If you know you will be living in the home for only a couple years, or you will be refinancing within the next few years, an ARM loan may be your best option. They generally have a lower interest rate than fixed rate mortgages, during the initial fixed period. A lower rate means a lower monthly payment.

Make sure that you fully research your options with ARM's. If you plan to sell in four or five years, a 2 year fixed loan would probably not be best for you. On the other hand, a 30 year fixed rate mortgage might have too high of an interest payment, while a 5 year fixed ARM sounds just about right.

If you are getting an Adjustable Rate Mortgage then you will want to make sure that you know how your mortgage will adjust. For instance some mortgages can adjust up to 5-6 percent after the initial fixed period meaning that your payment could dramatically increase right away instead of gradually increasing. So make sure to ask what your caps, margin and index are for your ARM.

(ARM) Adjustable Rate Mortgage - An Adjustable Rate Mortgage is a loan in which the interest rate varies at predetermined intervals in step with the movements of an agreed upon external index rate for some portion of the life of the loan.

A mortgage in which the interest periodically "adjusts", according to various fluctuations in an index. All ARMs are tied to indexes. Common indexes are T-Bill, MTA, COFI, COSI, CODI, & LIBOR.

It will be in your best interest to refinance the ARM before it begins to adjust. Although there areinterest rate caps on the amount of the first rate adjustment, once the ARM begins to adjust your payent will more then likely increase.

Adjustable rate mortgages often have lower initial interest rates and payments.

Today's Adjustables lock in lower rates for longer than ever before, so you can fix that low initial interest rate for 5 years or more.

For customers who plan on living in their home for less than 5 to 7 years, adjustable rate mortgages, particularly fixed/adjustable hybrids are often an excellent option.

Adjustable Rate Mortgages or ARM mortgages are an excellent choice for your first home purchase, for growing families, and for building up credit.