This loan is a good fit for borrowers who plan on living in their home for at least seven years. Generally, the lower the term, the lower the interest rate.
Adjustable Rate Mortgages (ARM) are available for 30 year terms and have an interest rate that adjusts after a fixed period of time (generally 1-7 years). After the fixed period of time interest rates adjust according to a financial index such as the Treasury Bill or the London Interbank Offered Rate (LIBOR). This loan is a good fit for borrowers who plan on moving within the fixed period of the ARM or need a lower payment for a couple years anticipating a better financial situation in the future. Generally, the longer the fixed term, the higher the interest rate.
For additional questions regarding Fixed or Adjustable Rate Mortgages please contact one of our mortgage professionals for more details, eligibility and availability.