An adjustable rate mortgage, also called an ARM, provides an affordable home loan for homeowners who plan to own a house for a short period of time. With this type of mortgage the home interest rate adjusts after set periods of time. The interest adjusts based on the index it follows and can adjust up or down. At the adjustment time period there is a maximum amount the interest rate may increase and includes a lifetime increase cap. In Wisconsin, Adjustable Rate Mortgages can be used to buy or refinance a home, investment property, second home or vacation home. Adjustable Rate Mortgages are offered as a conventional loan, FHA loan or VA loan.
Adjustable Rate Mortgages allow you to have initial lower payments if you are willing to assume the risk of a change to the home interest rate at the set time periods.
The length of an Adjustable Rate Mortgage may be 10 years, 7 years, 5 years, or 3 years with the monthly mortgage payment amortized over 30 years.
An ARM may be the right mortgage if you plan to be in the home for a short period of time.
Adjustable Rate Mortgage eligibility is based on several criteria. Your credit profile, work history, income, and debts are evaluated as part of the affordable home loan process and are compared to the established home loan guidelines. To find out if you’re eligible for an Adjustable Rate Mortgage, speak with one of our expert home lenders. We’ll help you decide if this affordable home loan is in your best interest.
ARM refinancing has several purposes. A few reasons to refinance your current home loan are to lower your monthly house payments, consolidate multiple debts, lower the interest rate, improve household cash flow, or to fund a remodeling project.