An Adjustable-Rate Mortgage (ARM) is a type of loan whose prevailing interest rate is tied to an economic index (like one-year Treasury Bills), which fluctuates with the market. The three most popular types of ARMs are one-year ARMs, which adjust every year, three-year ARMs, which adjust every three years, and five-year ARMs, which adjust every five years. When the loan adjusts, the lender tacks a margin onto the economic index rate to come up with your loan’s new rate. ARMs are considered riskier than fixed-rate mortgages, but their starting interest rates are generally lower than a longer-term rate. Learn more about ARMs and other mortgage options here.
ARM Borrowers Turning To Fixed-Rate Mortgages
It looks like adjustable rate mortgages (ARMs) are falling out of favor -- and with good reason. This morning, Freddie Mac announced that for borrower...
Get the Best Loan at the Best Rate on the Best Terms
When it comes time to buy a house, the biggest purchase that you will ever make, you need to make sure you have the right mortgage for your needs. It might not be the cheapest, but it might work if the interest rate, fees, and timeline are correct for your budget. The loan you choose needs to work for your personal finance situation not only on the day you close, or for the first year, but for the entire time you plan to live in the property and keep that loan.
Pay Off Mortgage Loan With Low Interest Rate?
When you have extra money is it better to pay off your mortgage or invest the money? It depends on the type of the mortgage loan and the interest rate on the mortgage loan. Paying off a mortgage may also depend on what stage of life you're in - whether you're still working or in retirement. In this case, Ilyce suggests waiting to pay off the mortgage loan because of its low interest rate.
What Do a Housing Economist, an Investment Analyst, and a Home Builder Have in Common?
What do a housing economist, an investment analyst, and a home builder all have in common? They all agree the housing market is weaker than it seems....
Refinancing Adjustable Rate Mortgage With High Interest Rate
How do you refinance an adjustable rate mortgage (ARM) on a home that is not your primary residence, but has a high interest rate. Learn how interest rates are determined for mortgages that are not a primary residence. If the home is not your primary residence, but is a member of your family's, you may want to put their names on the mortgage in order to lower the interest rate.
Understand Mortgage Before Signing Papers
Never sign a mortgage document unless you understand exactly the terms of the mortgage. A home owner refinanced into an adjustable rate mortgage that has a growing interest rate she can no longer afford. The fine print of real estate contracts will tell you exactly what to expect for the life of your loan.
Refinancing ARM Mortgage Loan
When deciding whether to refinance it takes more than just considering the duration of the loan and the interest rates. You have to calculate whether you can earn back the money you spent on points (a point equals 1 percent of the loan) in enough time to make it worth it to refinance. Paying too many points to refinance a mortgage with a small interest rate change may not make sense.
ARM Mortgage Rates Increase
What can you do when the introductory rate on your adjustable rate mortgage (ARM) is expiring? You need to understand what index your ARM mortgage is tied to and how the rate will change after the introductory period. You can then decide whether to refinance your ARM mortgage with a different interest rate.
Refinancing Home For Sale With Increasing ARM
Can you refinance your home because your adjustable rate mortgage(ARM) has just increased? If there are other factors involved, besides the ARM increasing, you may not be able to refinance your mortgage. For example, banks will not refinance a mortgage loan when a home is on the market.
Meet The 300th Million American And Mortgage Rates
From today's batch of press releases: The U.S. Census Bureau today reported that the nation's population will reach the historic milestone of 300 mil...