Adjustable Rate Mortgages (ARMs)
Adjustable Rate Mortgages or “ARMS” come in many varieties to meet specific home owners needs.
Convertible ARMS – allow you to go from an adjustable rate to a fixed rate once specific criteria has been met.
3/1, 5/1, 7/1, & 10/1 ARMS – Are a fixed rate for 3, 5, 7, or 10 years and then adjust once a year after the initial period is over.
3/6, 5/6, 7/6, & 10/6 ARMS- Are a fixed rate for 3, 5, 7, or 10 years and then adjust every six months after the intial period.
Lender Margins- On an adjustable rate mortgage the intrest rate the home owner is paying is determined by adding a specific amount of interest , known as “the margin” added to the current interest rate of the index.
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