Adjustable-Rate Mortgages (ARMs)

Adjustable-rate Mortgages, commonly referred to as ARMs are still available to most borrowers.  ARMs usually have a lower interest rate than fixed-rate mortgages.  After the initial fixed term, which is typically 3, 5, 7, 10 or 15 years, the interest rate fluctuates based on an index.  It is important for the borrower to weigh the risk that an increase in interest rates would lead to higher monthly mortgage payments in the future.  An ARM may be a good choice for you if you:

• Want lower monthly payments in the first 3-15 years of your mortgage
• Expect to sell or refinance the property before the rate adjustments kick in.
• Expect to be able to pay off the mortgage before the rate adjustments kick in.