Adjustable Rates Mortgage Loans
What Are Adjustable Rate Mortgage Home Loans?
Adjustable Rate Mortgage Home Loans usually over lower interest rates than a typical 30 year fixed rate term. However, in todays ultra low interest rate market it is just not recommended. In some cases, even with ulra low interest rates. In general, an adjustable rate mortgage (ARM), can have a certain time period where the rate is fixed. These fixed rate periods are 3 years, 5 years, 7 years and a 10 year fixed period. Thereafter, each additional year the rate can re-adjust.
Re-adjustments are based on a few important factors to be very mindful of when you cautiously consider the use of these financial products. The adjustable rate is usually based on an idex that determines if the rate should adjust up or down. If the index has increased during an adjustment period, than based upon the margin (the allowable adjustment per period) your rate will be adjusted accordingly. You will be provided with a CAP. This CAP limits the highest your ineterst rate can be over the life of the loan. Simply said, non qualified mortgage loans are for borrowers that have blemished credit due to 30, 60, or 90 days late on credit lines and or excessive collections, repossessions and charge offs. As of January 2014 Mortgage Lenders will start introducing loan products for these borrowers.
When would I want to use this Loan Product?
If you have a definite exit date that you will hold the property, and interest rates are not expected to increase, and the difference in the interest rate is substantial. A true cost benefit analysis is needed to determine if this even makes sense.
Due to the expanding financial market other loan programs may be available that may provided better lending terms.
By completing our brief online Real Time Loan Quote we will calculate your monthly payments with all products and provide you with real numbers so you can make an educated decision.