Fixed or Adjustable Mortgage Rate
Which is right for you?
With a fixed rate mortgage (FRM), your monthly payments will be steady. In contrast, with an adjustable rate mortgage (ARM) , your payments will vary over time. Adjustable mortgage rates typically have an initial fixed rate lower than the rate of a comparable fixed rate mortgage. The initial fixed rate period is followed by adjustment intervals. For example, a "3/1 ARM" is fixed at an initial low rate for the first 3 years, and then adjusts every year based on an index. Common ARMs are: 1/1, 3/1, 7/1, and 10/1.
|
Adjustable Rate Mortgages:
Programs:
10/1 ARM
7/1 ARM
3/1 ARM
1 year ARM
6 month ARM
1 month ARM
|
Advantages:
·Lower initial monthly payment
·Lower payment over a shorter period of time
·Rates and payments may go down if rates improve
·May qualify for higher loan amounts
|
|
|
