Adjustable Rate Mortgages

Adjustable-rate mortgages (ARMs) can offer a great financing solution for your home purchase.ARMs provide an initial fixed-rate period during which your interest rate remains stable. We offer two types of ARMS –a 5/1 ARM and a Construction-to-Permanent ARM. Here's how they work:

5/1 ARM:

This option provides an initial fixed interest rate for the first 5 years, after which it adjusts annually.

Construction-to-Permanent ARM: The initial 12-month interest-only period is followed by principal and interest payments at a fixed rate for the remaining 48 months (for a total of 5 years for the fixed rate then adjusted annually).

How It Works:

Following the fixed-rate period, an ARM's interest rate fluctuates in response to the current market index. This adjustment occurs annually. To determine the new rate and payment, your lender adds the current index to a predefined margin. The specifics of your ARM, including the rate adjustment frequency, the index used, the margin, the maximum rate change per adjustment, and the maximum and minimum rates throughout the loan's life, are clearly outlined in your loan closing documents. This process repeats with each adjustment date.

While ARMs may appear complex, there's no need for concern. Our bankers are always available to guide you through the intricacies of adjustable-rate mortgages.