Adjustable Rate Mortgage (ARM)

Adjustable Rate Mortgage (ARM)

 

An adjustable-rate mortgage (ARM) is a mortgage with an interest rate that may change over the life of the loan. It typically has an initial fixed-rate period (set at a rate lower than comparable fixed-rate mortgages) during which time the rate doesn’t change. After this fixed-rate period ends, the rate changes to reflect current market rates, going up or down accordingly. Note that ARM rates and payments are capped as to how much they can change.

ARMs are most desirable for Colorado borrowers that aim to keep their home for five years or less. ARMs allow borrowers to keep their monthly payments manageable during the initial term, and pay down their mortgages more quickly.

3/1 and 5/1 ARMs typically have the lowest interest rates and monthly payments. This means the introductory rate lasts for 3 or 5 years respectively, and after that, the interest rate can change every year. The most popular ARM is the 5/1 arm.

If you are looking to purchase a home in Colorado, an adjustable rate mortgage can be a great option for you and your family. Excel Financial can help you through the process whether you would like a 5-1 ARM or 3-1 ARM on your Colorado home or something else entirely, we can help.

Adjustable Rate Mortgage (ARM)

Any Questions ?

QUICK QUOTE