ARM Loans

Adjustable-rate mortgages (ARM) are indexed-based mortgage loans. They provide extra payment flexibility and offer interest rates as low as 1%.

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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: