Adjustable Rate Mortgages (ARM) are ideal for homeowners who may move soon, pay off the home loan quickly or are willing to take the risk that the rate will adjust lower in the future. This real estate loans offers a lower initial interest rate than fixed loans and the rate can adjust periodically. This means your monthly payments could be higher or lower throughout the life of the loan.
You have several options available for how long the initial lower interest rate will be in place. Once that time period is over, the interest rate can change every year. The interest rate changes based on market conditions, using an index published in the Wall Street Journal. So, if the index rate does down, your monthly payment may go down, depending on the type of Adjustable Rate Mortgage you select. Even though the rate can change throughout the loan, there are limits, or caps, on how much the rate can increase or decrease.
AlaTrust has a variety of Adjustable Rate Mortgages. Your loan officer can help you select the right one for your unique situation. For more information about our ARM loan call 800-264-8031.