Adjustable Rate Mortgage Is Right For You
Adjustable Rate Mortgage and Why You Should Choose This Option
What is an Adjustable Rate Mortgage or ARM? An Adjustable Rate Mortgage is a mortgage option for the purchase residential properties. They can be used for the purchase of a home or second home, or an investment property. But they can also be used in refinancing a current property. The ARM consists of a fixed period and an adjustable period. The fixed period keeps the same rate over the loan you agree to. An example, a 5/1 ARM the fixed period is for 5 years. After those 5 years, you interest rate will adjust according to the market. Let’s take a look at ARM options a little more closely.
ARM When Purchasing a Home or Second Home
An ARM loan may be beneficial today more than ever because of the current higher rates of fixed-rate mortgages. ARM rates usually start out lower than fixed-rate mortgages. So this helps out if you are looking to get the lowest rate possible. When buying your first home or upgrading to bigger home because your family is growing, the ARM may be a great option for you. Another added benefit is more house for your buck. With the lower rate you can choose a house that may be out of reach if your option was a fixed-rate mortgage. So, for purchasing a home an ARM mortgage may be your best bet in today’s market.
ARM When Purchasing an Investment Property
When buying an investment property, you have 2 options. You can rent it out to offset the mortgage cost. Or you may buy the property to flip it. Both of these options may work with an Adjustable Rate Mortgage. Just like when buying a home, it benefits you to choose the best rates you can get. With rates and inflation hitting the consumers wallets hard, an ARM would alleviate some of the stress that today’s fixed-rates come with. And keep a little more change left over in your pocket.
Refinancing When It Comes To ARMs
When it comes to ARMs, you can refinance into another ARM loan or into a fixed-rate loan. This will depend on your situation. All the options that applied earlier in this article will still apply. You will want to choose the best rate at the time of refinance. That may be an ARM loan depending on the fixed-rates at that time. And it may depend if it’s an investment property that you rent and you need to lower the rate because you reached the adjustable rate of the loan. In the end, it may be time to go the fixed-rate loan option.
Whatever your needs are when purchasing a house, Tristate Lending Group (a division of EMM Loans) is here for you. We will walk you through the mortgage process and give you your best options. You can contact us by email@example.com or by calling us (856) 581-2001. You can get preapproved by Applying Now.