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Davie Home Finance, 115 Donna Rd NE, Palm Bay, FL 32907
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ARM-Adjustable Rate Mortgage
ARM Adjustable Rate Mortgage - Adjustable Rate Mortgage; a mortgage loan
subject to changes in interest rates; when rates change, ARM monthly payments
increase or decrease at intervals determined by the lender; the Change in monthly
-payment amount, however, is usually subject to a Cap.
ARM products almost always have an initial interest rate that is lower than that of
fixed rate products of the same loan term. These lower starting rates, also referred
to as Teaser Rates, are meant to induce/reward borrowers who are willing to bear
some of the risks of future interest rate movements.
ARM's are great for keeping your payment down for a fixed period of time while
you work on your FICO score and aim for a better fixed rate down the road.
There are many Adjustable Rate Mortgage products available today. Some ARM
products have rates that adjust immediately the following month after settlement,
others have an initial fixed rate period of 1, 3, 5, 7, or 10 year. ARM that have an
initial fixed interest rate period is also known as Hybrid Loans.
When choosing an ARM product, it is as important to consider the underlying
indexes and margins as picking the lowest teaser rates. Different indexes have
different sensitivity to the interest market. In other words, some indexes such as
Treasury bills and LIBOR are highly sensitive to market conditions and adjust
rapidly. The 11th District Cost of Funds Index, also known as COFI, tends to move
slower in comparison and therefore less volatile.
If you are considering an adjustable rate mortgage, make sure you do your
research. Find out how often the rates can increase and by how much. Try to
determine whether you can afford payments if the rates go up significantly over the
next few years.
I can help you to determine if an ARM is right for you and your situation.
ARM Adjustable Rate Mortgage - Adjustable Rate Mortgage; a mortgage loan
subject to changes in interest rates; when rates change, ARM monthly payments
increase or decrease at intervals determined by the lender; the Change in monthly
-payment amount, however, is usually subject to a Cap.
ARM products almost always have an initial interest rate that is lower than that of
fixed rate products of the same loan term. These lower starting rates, also referred
to as Teaser Rates, are meant to induce/reward borrowers who are willing to bear
some of the risks of future interest rate movements.
ARM's are great for keeping your payment down for a fixed period of time while
you work on your FICO score and aim for a better fixed rate down the road.
There are many Adjustable Rate Mortgage products available today. Some ARM
products have rates that adjust immediately the following month after settlement,
others have an initial fixed rate period of 1, 3, 5, 7, or 10 year. ARM that have an
initial fixed interest rate period is also known as Hybrid Loans.
When choosing an ARM product, it is as important to consider the underlying
indexes and margins as picking the lowest teaser rates. Different indexes have
different sensitivity to the interest market. In other words, some indexes such as
Treasury bills and LIBOR are highly sensitive to market conditions and adjust
rapidly. The 11th District Cost of Funds Index, also known as COFI, tends to move
slower in comparison and therefore less volatile.
If you are considering an adjustable rate mortgage, make sure you do your
research. Find out how often the rates can increase and by how much. Try to
determine whether you can afford payments if the rates go up significantly over the
next few years.
I can help you to determine if an ARM is right for you and your situation.
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