Adjustable-Rate Mortgage (ARM) Loans

Start with a Lower Rate and Maximize Short-Term Savings

Explore your options and see if an ARM fits your financial goals.

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What is an Adjustable Rate Mortgage?

Adjustable rate mortgages are loans with interest rates that adjust periodically over the life of the loan. They usually begin with a fixed period of time where the rate is set, such as five or seven years. After that initial period, the rate can adjust annually or even more frequently based on market conditions.

ARMs have a lower initial interest rate compared to fixed-rate mortgages, which can make them an attractive option for homebuyers looking to save on monthly payments. However, the tradeoff is that rates can go up or down over the life of the loan, which can lead to uncertainty about future payments.

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Pros and Cons of Adjustable Rate Mortgages

Adjustable rate mortgages have both advantages and disadvantages. Here are some key things to consider:

Pros

Lower initial interest rates and monthly payments
Ability to qualify for a larger loan due to lower initial payments
Opportunity to take advantage of falling interest rates

Cons

Uncertainty about future payments due to potential rate increases
Higher payments in the future if rates increase
May be harder to budget for future payments

Who Should Consider an Adjustable Rate Mortgage?

Adjustable rate mortgages are a good option for homebuyers who plan to live in their home for a shorter period of time, or for those who anticipate an increase in income over the life of the loan. However, they may not be the best choice for those who are on a fixed income, or who plan to stay in their home for a longer period of time.

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Get in Touch with Mortgages by Scott

If you’re interested in learning more about adjustable rate mortgage home loans, Mortgages by Scott is here to help.

Our team of experienced mortgage brokers can help you navigate the home loan process and find the best financing options for your unique situation. Contact us today to learn more.

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Scott Hastings, NMLS #926762
Arbor Financial, NMLS #236669

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Equal Housing Lender. All loans subject to credit and property approval.