Adjustable Rate Mortgage Features
- 100% financing available
- Often a lower rate and payment than with conventional mortgages
- Caps protect you from rising rates and when the rates go down so does your mortgage payment
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Why Choose an Adjustable Rate Mortgage (ARM)?
Lower Initial Payments:
ARMs typically start with a lower interest rate than fixed-rate mortgages. This often means lower monthly payments in the early years, helping you manage cash flow or put money toward other priorities like savings or home improvements.
Flexibility for the Future:
Many borrowers choose an ARM knowing their situation may change. Whether you plan to move, refinance, or adjust your loan down the road, an ARM can offer short-term savings while keeping long-term options open.
Planning to Refinance:
Some borrowers use an ARM as a starting point, with the goal of refinancing later into a fixed-rate mortgage, such as a 30-year loan if interest rates and personal finances allow. Refinancing is not guaranteed and depends on factors at the time, including market rates, home value, credit, and income.
Ideal for Shorter-Term Homeownership:
If you expect to sell your home within a few years, an ARM may allow you to benefit from the lower introductory rate without ever reaching the adjustment period..
How Could a 5-Year / 6-Month ARM Work?
A 5-Year / 6-Month ARM offers a fixed interest rate for the first five years. After that, the rate may adjust every six months based on market conditions, subject to rate caps.
Example:
Loan Amount: $300,000
ARM Type: 5-Year / 6-Month
First 5 Years: Your interest rate, and principal and interest payment are fixed for the first five years (the “5” in a 5-Year / 6-Month ARM)
After Year 5: The interest rate and payment may change every six months for the remainder of the loan term (the “6” in a 5-Year / 6-Month ARM), based on market conditions and subject to rate caps
Use our Adjustable Rate Mortgage Calculator to see if a 5-Year / 6-Month ARM may be a good fit—or connect with our Mortgage Origination Team to discuss your options.
Download our Home Buyer Application Checklist to help you gather and organize important documents you will need during the application process.