Finding the Right Loan
Is this possibly the right mortgage loan option?
Our personal loan consultants are here for you.
A Hassle-Free Purchase
One of our mortgage professionals can help you
choose the right loan with the best terms.
Adjustable Rate Mortgage (ARM)
While many people prefer to get a fixed rate mortgage for their homes, countless others opt for adjustable rate mortgages. An adjustable rate mortgage (ARM) offers a bit more flexibility in interest rates, which may appeal to you under certain circumstances. If you need to get a mortgage for your home in Martinsburg, Hedgesville, or Charles Town, WV, you might want to consider an adjustable rate mortgage.
How Adjustable Rate Mortgages Work
An adjustable rate home loan is a mortgage with an initial period in which you pay a fixed interest rate. After that initial period, the loan is subject to rate adjustments that occur periodically. An ARM might seem like a risky prospect, since your payments may decrease or increase due to general changes in interest rates. However, getting an ARM might actually save you thousands of dollars if you choose it over a fixed rate loan. When you get an adjustable rate home loan, the mortgage will have an interest rate that is fixed at first. This initial period generally lasts from a few years to 10 years. The introductory rate is less than the amount you would pay for a 30-year fixed rate loan. After the initial phase, your mortgage rate adjusts periodically. These adjustments are based on the specific terms of your loan, as well as a benchmark interest rate index, which is selected by the lender. Usually, the total term of the ARM is a 30-year period.
Who May Benefit From an Adjustable Rate Mortgage
An ARM could be appropriate if you plan to relocate in the short term. In that case, you would pay the lower interest rate for a few years, and you could sell your home before you become subject to higher interest rates. This type of mortgage could also be a good choice if you know you will progress in your career in a relatively short period of time. If you know that you will ultimately be making more money at your job than you are now, then higher interest later will not likely be a burden. This logic also applies if you know you will inherit money or receive other funds that would help to defray the cost of the higher interest rates you would pay later.
Adjustable Rate Mortgages Terms
To give you an idea of the breakdown between the initial period and the subsequent period of an ARM, take a look at these examples (all based on the typical 30-year term for an ARM):
- 3/1 ARM: The interest rate is set for 3 years. It then adjusts for the remaining 27 years.
- 5/1 ARM: The interest rate is set for 5 years. It then adjusts for the remaining 25 years.
- 7/1 ARM: The interest rate is set for 7 years. It then adjusts for the remaining 23 years.
- 10/1 ARM: The interest rate is set for 10 years. It then adjusts for the remaining 20 years.
Apply for an Adjustable Rate Mortgage
If you need a home loan, and you are not particularly concerned about higher interest payments over the long term, you might apply for an adjustable rate mortgage. Homespire Mortgage can assist people who live in Martinsburg, WV, along with those who live in the surrounding areas, such as Hedgesville, Charles Town, Falling Waters, and Shepherdstown. Do not hesitate to give us a call, so we can help you find the best home loan for you.
Contact us today for all your mortgage and refinancing needs!
Adjustable Rate Mortgage (ARM)
While many people prefer to get a fixed rate mortgage for their homes, countless others opt for adjustable rate mortgages. An adjustable rate mortgage (ARM) offers a bit more flexibility in interest rates, which may appeal to you under certain circumstances. If you need to get a mortgage for your home in Martinsburg, Hedgesville, or Charles Town, WV, you might want to consider an adjustable rate mortgage.
How Adjustable Rate Mortgages Work
An adjustable rate home loan is a mortgage with an initial period in which you pay a fixed interest rate. After that initial period, the loan is subject to rate adjustments that occur periodically. An ARM might seem like a risky prospect, since your payments may decrease or increase due to general changes in interest rates. However, getting an ARM might actually save you thousands of dollars if you choose it over a fixed rate loan.
When you get an adjustable rate home loan, the mortgage will have an interest rate that is fixed at first. This initial period generally lasts from a few years to 10 years. The introductory rate is less than the amount you would pay for a 30-year fixed rate loan. After the initial phase, your mortgage rate adjusts periodically. These adjustments are based on the specific terms of your loan, as well as a benchmark interest rate index, which is selected by the lender. Usually, the total term of the ARM is a 30-year period.
Who May Benefit From an Adjustable Rate Mortgage
An ARM could be appropriate if you plan to relocate in the short term. In that case, you would pay the lower interest rate for a few years, and you could sell your home before you become subject to higher interest rates. This type of mortgage could also be a good choice if you know you will progress in your career in a relatively short period of time. If you know that you will ultimately be making more money at your job than you are now, then higher interest later will not likely be a burden. This logic also applies if you know you will inherit money or receive other funds that would help to defray the cost of the higher interest rates you would pay later.
Adjustable Rate Mortgages Terms
To give you an idea of the breakdown between the initial period and the subsequent period of an ARM, take a look at these examples (all based on the typical 30-year term for an ARM):
- 3/1 ARM: The interest rate is set for 3 years. It then adjusts for the remaining 27 years.
- 5/1 ARM: The interest rate is set for 5 years. It then adjusts for the remaining 25 years.
- 7/1 ARM: The interest rate is set for 7 years. It then adjusts for the remaining 23 years.
- 10/1 ARM: The interest rate is set for 10 years. It then adjusts for the remaining 20 years.
Apple for an Adjustable Rate Mortgage
If you need a home loan, and you are not particularly concerned about higher interest payments over the long term, you might apply for an adjustable rate mortgage. Homespire Mortgage can assist people who live in Martinsburg, WV, along with those who live in the surrounding areas, such as Hedgesville, Charles Town, Falling Waters, and Shepherdstown. Do not hesitate to give us a call, so we can help you find the best home loan for you.
Contact us today for all your mortgage and refinancing needs!