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Adjustable Rate Mortgage (ARM)
An ARM gives you a fixed rate for an initial period, then adjusts based on market conditions. Lower upfront cost with built-in flexibility.
WHAT IS AN ARM?
An Adjustable Rate Mortgage starts with a fixed interest rate for a set number of years, then adjusts periodically.
Common structures include 5/6, 7/6, or 10/6 ARMs, where the first number is the fixed period and the second is how often the rate can adjust.
This loan is ideal if you do not plan to hold the property long term or expect your financial situation to change.
Lower Initial Rate
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Typically lower than fixed-rate loans
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Reduced monthly payments early on
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Strong short-term savings
Flexible Strategy
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Refinance before adjustment period
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Ideal for relocations or upgrades
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Works well for investors
WHY CHOOSE AN ARM?
Lower Starting Payments
Take advantage of lower rates during the initial fixed period.
Short-Term Advantage
Maximize savings if you plan to sell or refinance.
Rate Adjustment Caps
Built-in limits help control how much your rate can change.
Ready to move forward? Let's get you pre-approved.
Common Questions About ARM
What happens when the rate adjusts?
Your rate changes based on market indexes, within set limits called caps.
Is an ARM risky?
It depends on your timeline. It works best if you plan ahead before the adjustment period.
Can I refinance before the rate changes?
Yes. Many borrowers refinance during the fixed period.
Who should consider an ARM?
Buyers planning to move, refinance, or hold the property short term.
