What Is an Adjustable Rate Mortgage?

Have you ever thought about how an adjustable rate mortgage (ARM) might work for you? What if your mortgage payments could start lower, but change over time based on market conditions? Would that be something you’d consider?

With an ARM, the interest rate is tied to an index, like the London Interbank Offered Rate (LIBOR), and may adjust up or down during the loan term. This means your monthly payments could change, unlike a fixed rate mortgage where your payments stay the same. Does that sound like an exciting option or a risk you’d prefer to avoid?

Adjustable Rate Mortgage Benefits

Here’s the thing: While ARMs carry some risk due to potential rate increases, they come with distinct advantages. The lower initial rates and monthly payments are one such benefit, right? Wouldn’t it be nice to pay less at the start of your loan, especially if you plan to move or your income is expected to rise in the future?

Interest Rate Caps

But, what if the rates do increase? That’s where interest rate caps come in—protecting you from significant jumps. With periodic and lifetime caps, do you think this safety net would make you feel more secure about choosing an ARM?

Get Pre-Qualified For An Adjustable Rate Mortgage

Ultimately, an ARM could be a great option if you’re looking for flexibility, but should you take on that risk? What would make an adjustable-rate mortgage fit your long-term financial goals?

Let’s talk through your options and see if an ARM aligns with your plans! Ready to explore?