Adjustable Mortgage Rates

An adjustable rate mortgage is a loan with an interest rate that's usually two or three points lower than a similar fixed rate mortgage. Companies offer them because they allow you to finance (or refinance) more money than a fixed rate loan would allow. Usually you start out with a fixed interest rate for a period of time, like three, five, or seven years, then the rate can change once yearly after that.

An adjustable rate mortgage, or ARM, is a good choice if you want low monthly payments initially and are not afraid to risk a higher rate later on. This may be the best choice for your mortgage loan if you're not going to stay in this home very long. If you know your job plans to transfer you in three years, for example, then an ARM with a three-year fixed rate would be just right for you.

The adjustment in the interest rate on your ARM will depend on the market rate. So if market rates go up, the amount you'll pay each month will go up too. Likewise, your payment could decrease if the market rates go down. If you notice a change in the Consumer Price Index (CPI) or the Producer Price Index (PPI), you'll see a change in your mortgage interest rate.

At American Mortgage Specialists, we offer flexible Adjustable Mortgages as well as hybrid loans that have both a fixed payment term and an adjustable term. For more information, contact us today at 1-866-385-5450, email info@amsaz.com, or fill out our Quick Application.