What is an Adjustable Rate mortgage?
It’s a type of mortgage in which the interest rate paid on the outstanding balance varies according to a specific benchmark. The initial interest rate is normally fixed for a period of time after which it is reset periodically, often every month.
Who should get an Adjustable Rate mortgage?
It’s typically available to anyone who wants the lowest rate currently available. ARMs transfer part of the usual “interest rate risk” carried by all home loans, from the lender to the borrower since the borrower is taking advantage of lower initial payments.
What are the pros and cons of Adjustable Rate mortgages?
- May help you to afford a bigger mortgage
- The initial interest rate is lower than it is on a fixed rate loan
- Can be cost effective if you don’t plan to stay in your new home for long
- Payments and interest can go up
- Payments tend to surpass the rates on a fixed rate loan
- Your loan could become more than you can afford.
Why Trust Providential?
We’ll save you more money and will offer you low interest rates compared to the competition. If you apply for an Adjustable Rate Mortgage online, you can save cash on your home loan and closing fees.
Providential has helped tens of thousands of borrowers find the perfect home loan option for them. Apply online today!
Other Loan Options:
- 30 Year Fixed Rate Mortgage
- 15 Year Fixed Rate Mortgage
- Jumbo Mortgages
- Reverse Mortgages
- FHA Loans
- VA Home Loans
- Interest-Only Loans
- USDA Home Loans
- 203K Loans
- HELOC Loans