Adjustable Rate Mortgage

Adjustable Rate Mortgages can be the right move for borrowers hoping to enjoy the lowest possible interest rate for a period of time. Many lenders are willing to provide lower interest rates for the initial period of your loan reducing your mortgage payment.

Although the lower mortgage payments are temporary, your budget will enjoy the initial lower monthly payments. Lower mortgage payments allow you to grow into your new home budget. You may even be able to pay more toward principal loan balance each month paying off your mortgage earlier.

An Adjustable Rate Mortgage may be the right option for those planning to move to a new area fairly shortly after buying your home. For example, if you intend to sell the home before the interest rate begins to adjust, any adjustments won’t be a problem for your budget – assuming the home sale goes through as planned and the mortgage is no longer yours to pay.

If you’re a buyer seeking your first home, you can also enjoy the benefits of an ARM because you’re planning to upgrade to a larger home when you can. If that plan allows you to sell the original home before the interest rate begins to fluctuate, the risks of an ARM are relatively minimal.

The flexibility you can build into your budget with the initial lower monthly payments offered by an ARM gives you the chance to build your savings and work toward other financial goals. Although there’s the looming chance of an interest rate hike after the initial period, you can build savings along the way to safeguard your finances against this possibility.

If you’re moving to a place you don’t anticipate being in for more than 5 - 7 years and are looking for the lowest interest rate on a mortgage, an ARM may be the best mortgage option for you.

Adjustable Rate Mortgages are a good choice if you:

Think interest rates will move lower in the future.
Do not plan to stay in your home for many years.
Need the flexibility of lower mortgage payments in your initial budget.
Expect an increase of income in the future.

The above description is very basic and does not cover all the details. Every loan product has fine nuances, exceptions, exclusions and inclusions. To find out which loan product fits you best you should consult a Mortgage Loan professional for tailoring your loan to your needs and your situation. FDM is qualified for all these loan products and more, including grants and other unique products.

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