Loan program
Adjustable-Rate Mortgage (ARM)
A lower fixed rate for the first several years, then a rate that adjusts with the market.
What type of home loan are you interested in?
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Common fixed periods: 5, 7 or 10 years
Starting rate is often lower than a 30-year fixed
Caps limit how much the rate can change at each adjustment and over the loan
An ARM gives you a fixed rate for an initial period. For example, a 7/6 ARM is fixed for 7 years and then adjusts every 6 months. After that, the rate follows a market index plus a set margin, within the caps written into your loan.
When an ARM makes sense
If you are likely to move, sell or refinance within the fixed period, you may pay less than you would with a 30-year fixed. Bill will walk through the worst-case payment with you so there are no surprises.
Questions to ask
- How long is the fixed period?
- What are the adjustment caps (first, periodic and lifetime)?
- What would the payment be at the maximum rate?
Best for: Buyers who expect to sell or refinance before the fixed period ends.
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A few quick questions, about two minutes. It doesn't touch your credit.