Adjustable Rate Mortgages

From America’s Mortgage Resource, serving Louisiana and Missippi

Are you interested in taking advantage of today’s low interest rates? America’s Mortgage Resource has offices in Metairie, New Orleans and Baton Rouge, LA. to help you take advantage of adjustable rate mortgages in order to receive the home financing solutions you need.

What is an Adjustable Rate Mortgage?

Adjustable rate mortgages, or ARMs, are loan options that are the opposite of fixed rate mortgages. Whereas fixed rate mortgages have guaranteed interest rates and payment amounts throughout the entire life of the loan, ARMs have interest rates and payment amounts that fluctuate with the market.

ARMs have adjustable rate periods. This period signifies how frequently your interest rates and how much the payment amounts might potentially change. Most adjustable rate mortgages have periods of either one or three years, but others can be for longer terms.

If you have a one-year adjustable rate period, this means that you will have the same interest rate for one year. Each year, on the anniversary of your loan, your interest rate could rise or fall. With a three-year adjustable rate, your rate will only change every three years.

Reasons to Choose an Adjustable Rate Mortgage

Most borrowers choose fixed rate mortgages because they enjoy the predictability, but there are several reasons that borrowers find ARMs more favorable:

Lowest possible rates over the short term

If you are interested in reducing your payments as much as possible over the short term, an ARM provides the best way to do so. Many homeowners who are planning on selling in the near future choose an ARM in order to take advantage of a greatly reduced interest rate during the initial fixed term.

Pay Less Over Time

Statistics have shown that, over time, adjustable rate mortgages generally owe less than fixed-rate mortgages.

More Flexible Terms

While fixed rate loans remain the same throughout the loan, ARMs provide more options, such as 1, 3, 5, or even ten year fixed rate periods.

While adjustable rate mortgages can have many different advantages, the one draw back is that they can be unpredictable moving forward. If you are considering an ARM, contact us at America’s Mortgage Resource with offices in Metairie, New Orleans and Baton Rouge, LA and let one of our loan officers help you find just the right loan for your scenario!