Should you consider an adjustable rate mortgage?
Do you plan to live in your home for a relatively short period of time? Are you watching as the fixed mortgages rates increase, driving up overall costs of home ownership? Maybe considering an Adjustable Rate Mortgage (ARM) will be beneficial to you.
What is an adjustable rate mortgage (ARM)?
An adjustable rate mortgage loan is just that…it “adjusts,” which means that, depending on the term you choose, you will have a lower rate for a fixed amount of time and then the interest rate will adjust at a certain interval after the initial period. For example, Guardian Credit Union offers one, three and five-year adjustable rate mortgage loans. You would have a fixed rate for one, three or five years, and then your rate would adjust every 12 months thereafter.
Why should I consider an ARM?
Generally, adjustable rate mortgages have lower initial rates than fixed mortgages. This can allow the buyer to afford a more expensive home.
What can I do if my ARM is set to adjust soon at a higher rate?
With an ARM, you can refinance out of the ARM if you choose. You can work with your mortgage team to determine whether it makes sense to let your loan adjust, refinance your ARM to another ARM or to refinance your ARM to a fixed rate loan.
If you’re ready to discuss adjustable rate mortgages or your other mortgage options, our mortgage team is ready to help you through the process. We’ll work with you to help you reach your goals. Additionally, we offer low rates and no pre-payment penalties. Plus, we retain servicing of your mortgage, so you can rest assured that your payments will always be made to us and you’ll be able to contact us directly with questions or concerns and receive great hands-on service throughout your mortgage term.