Jumbo

Your Path to Homeownership

Adjustable Rate Mortgages (ARMs) offer an initial fixed interest rate period followed by fluctuating rates based on market trends. This type of mortgage can be an attractive option for those planning to stay in their home for only a few years, or who anticipate a future increase in their income. ARMs can provide lower initial payments compared to fixed-rate mortgages, making homeownership more accessible in the short term. However, borrowers must be prepared for potential increases in their interest rates and monthly payments over time, depending on market conditions.

Adjustable-Rate Mortgages (ARMs) offer an initial lower interest rate that adjusts over time based on market trends. This type of mortgage is ideal for borrowers seeking lower initial payments and those who plan on moving or refinancing before rates rise.

Lower Initial Rates

ARMs typically start with lower interest rates than fixed-rate mortgages, making them attractive for short-term savings.

Interest Rate Caps

 These loans come with caps that limit how much the interest rate or the monthly payment can increase, offering some protection against drastic rate hikes.

Rate Adjustments

The interest rate on an ARM can go up or down after the initial fixed period, based on a specified financial index plus a margin.

Various Adjustment Periods

ARMs are available in several types, like 3/1, 5/1, and 7/1 ARMs, where the first number indicates the initial fixed-rate period, and the second shows how often adjustments occur after that period.

Adjustable-Rate Mortgages are best suited for those who anticipate a rise in income or plan to sell or refinance their home before the interest rate adjusts significantly. While the initial lower payments can offer immediate financial relief, it's crucial for borrowers to understand how future rate adjustments could affect their payments and overall loan cost. ARMs provide flexibility and potential savings, but they also require borrowers to be financially prepared for changes in their monthly mortgage expenses.