Adjustable-rate mortgages offer a fixed rate for an introductory period-typically for five, seven or 10 years-before the rate changes based on an index that it tracks, such as LIBOR. How often an ARM’s rate adjusts depends on the loan’s parameters.
. to take out an ARM under any of these common assumptions should consider whether they would still be able to manage the mortgage if their assumptions don’t pan out. If the ARM appeals to you but.
You should only consider an ARM refi if you are confident you will have the mortgage only as long as the first reset. says Drew Grandi, a loan originator with Wintrust Mortgage in Massachusetts. What should you do? It really depends. to live in your home for a short time before selling it, an ARM is considered a.
Define Adjustable Rate Mortgage Every home purchase is different, and every homebuyer has different mortgage. whether an ARM is a wise financial choice. arm contracts are also typically more complex than fixed-rate mortgages.
Home Personal Finance Banking Why You Should Consider an Adjustable-Rate Mortgage. Why You Should Consider an Adjustable-Rate Mortgage. By Michael Kling on 15 August 2013 3 comments.
Adjustable Arms An adjustable-rate mortgage (ARM) is a type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan. With an adjustable-rate mortgage, the.
In this situation, an adjustable-rate mortgage could make sense. future sale plans. Another reason that you might want to consider an adjustable-rate mortgage is if you have future sale plans for your home. If you plan on purchasing a house and staying in it for 30 years, then an adjustable-rate mortgage would not make much sense.
An adjustable rate mortgage, called an ARM for short, is a mortgage with an interest rate that is linked to an economic index. The interest rate and your payments are periodically adjusted up or down as the index changes.