(1Rates subject to change; 2APR is Annual Percentage Rate)
Also known as variable-rate mortgages and ARMs, adjustable-rate mortgages are an attractive option when mortgage rates are high and anticipated to decline in the future.
ARMs start with a rate that is usually lower than the current fixed-rate options and remains at that rate for a set number of years (often five years) before the rate changes to match the current mortgage rate at defined intervals, as much as every year. The initial lower rate often means the monthly mortgage payment will be lower, making it an attractive option for homebuyers looking to keep a home purchase within a set budget.
With ARMs, it is important to know the original rate, the term of that rate, the frequency of rate adjustments, and the “ceiling and floor” rates. These caps are set on the amount the rate can rise or fall in one year or over the life of the loan. If you think you might want to refinance in the future, be sure to check whether you can pay off early without penalty. In some cases, you might find that there is a payment cap, which sets out, as a dollar amount, how high the payment can rise over the lifetime of the loan.
ARMs can be complex, so it is a good idea to work closely with a mortgage specialist to be sure to understand all the terms and conditions that can impact your payment now and in the future. You can do some detective work on your own by using loan calculators to see what impact a variety of changes will have on your monthly payment.
We want to be certain that our members have the best opportunity to make informed decisions and the Mortgage Lending Experts Lending Experts with ITCU are always available to guide you through the process.
The Federal Reserve has put together a Consumer Handbook on Adjustable-rate Mortgages, which provides detailed descriptions of the parts of an ARM, along with features, cautions and a handy glossary of terms.
If you are ready to explore adjustable-rate mortgages at ITCU, take a look at the great interest rates interest rates we offer and then contact us or use our handy online online application to get the mortgage process rolling today.
* Mortgage loans not currently available in the following states: AZ, ID, HI, KS, ME, MN, MO, ND and NY. Not a complete list of available options. Click on Personal Personal Rate Quote Quote or speak to one of our mortgage professionals by clicking on Meet Our Meet Our Loan OfficersLoan Officers for more information. Conventional interest rates are based on the purchase of a single-family primary residence in Texas for $500,000 with 20% down payment, a loan amount of $400,000, and a qualifying FICO score of 740 or above. Rates are indications only and are subject to change without notice. Rates quoted assume a 0.50% origination fee paid by borrower. Lower rate options may be available. The actual interest rates and fees available to you will be based on your actual credit history and other qualifying criteria and may be different than the rates, points, and fees displayed here. Your actual interest rate will be determined at the time an interest rate lock is completed. Equal housing lender. NMLS ID# 149532
