Adjustable Rate Mortgages Provide Extra Flexibility and
Super Low Rates
Adjustable rate mortgages (ARMs) is the name for a family
of mortgages where the interest
rate is occasionally adjusted based on the index. ARM loans
provide many special benefits for borrowers, including:
- Flexible payments: Pay
more or less each month depending on your needs. There are
four different payment options available each month!
- Re-amortization: The loan
and interest are re-amortized after each payment. The more
you pay, the less you owe – in both principal and
interest. As you pay off the loan, your minimum payment
amounts will decrease, like paying off a credit card. A
single large payment, when you can afford it, can
significantly lower future payment
- Low mortgage rates: Because
the ARM loan is attached to an index and reduces risk for
the lender, the savings are passed on to you, the
borrower. You can pay as little as 1%!
Tying ARM loans to an index is done to guarantee a stable
margin for the lender/mortgage company, whose own cost of
funding is usually related to the index. As a result, your
mortgage payments may change over time with the varying
interest rate (alternatively, the term of the loan may
change). ARMs shouldn’t be misunderstood to be a graduated
payment mortgage (GPM), which is a loan that offers
shifting payment amounts, but a fixed interest rate.
Adjustable rate mortgages reassign some of the interest rate
risk from the mortgage
company to you. These loans can be used where irregular
interest rates make fixed rate loans hard to secure and are
distinguished by their index and restrictions on charges
(caps). With an adjustable rate mortgage loan you will benefit
if the interest rates falls and lose if interest rates rise.
So before deciding if an ARM loan is the right loan for your
situation, please contact First Atlantic to help decide which
mortgage path and the type of loan payment that fit your
distinct situation.
Bring clarity to your mortgage loan search by finding the
ARM that best suits you:
 Live
in New Jersey? We specialize in New
Jersey Adjustable Rate Mortgages.
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