Adjustable Rate Mortgage

Start with a lower interest rate and enjoy flexible options for your home financing.

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At Professional Mortgage Associates, our Adjustable Rate Mortgage (ARM) offers you the advantage of lower initial interest rates, helping you save money during the early years of your loan. An ARM is a great choice for homebuyers seeking flexibility, particularly if you plan to move or refinance before the rate adjustment period begins. With our guidance, you can determine if an ARM is the right solution for your financial goals and homeownership journey.

Why Choose an Adjustable Rate Mortgage?

An Adjustable Rate Mortgage (ARM) offers an initial fixed-rate period, typically ranging from 3 to 10 years, followed by periodic rate adjustments based on current market conditions. The primary advantages of an ARM include:

  • Lower Initial Payments: Benefit from a lower interest rate at the start of your loan term, which means lower monthly payments in the initial years compared to a fixed-rate mortgage.
  • Flexibility: Ideal for homebuyers planning to move or refinance within a few years, as you can take advantage of the lower rate before adjustments begin.
  • Potential for Decreasing Rates: If market interest rates decrease over time, your adjustable rate could go down, leading to lower monthly payments in the future.

Benefits of an Adjustable Rate Mortgage (ARM)

When you choose an ARM with Professional Mortgage Associates, you can expect several distinct advantages:

  • Lower Interest Rate at the Start: Take advantage of a lower initial interest rate compared to fixed-rate options, making homeownership more affordable upfront.
  • More Buying Power: With lower initial payments, you may qualify for a larger loan, allowing you to purchase a more expensive home.
  • Adjusts to Market Trends: Benefit from market trends if rates decrease, potentially lowering your overall mortgage cost.

Is an Adjustable Rate Mortgage Right for You?

An Adjustable Rate Mortgage is well-suited for:

  • Homebuyers who plan to sell or refinance their home before the adjustable period starts.
  • Individuals who want to take advantage of lower initial interest rates and monthly payments.
  • Those comfortable with potential rate adjustments and are looking for a short-term savings opportunity.

How Do Adjustable Rate Mortgages Work?

An ARM starts with a fixed interest rate for an initial period—typically 3, 5, 7, or 10 years—depending on the specific ARM product. After the initial period, the interest rate will adjust periodically based on an index, such as the LIBOR or SOFR, plus a margin set by the lender. For example, a 5/1 ARM features a fixed rate for the first five years, and then the rate adjusts annually after that. This structure allows you to enjoy low payments early on, and you can decide later whether to refinance or keep the loan as rates adjust.

Apply for an Adjustable Rate Mortgage Today

At Professional Mortgage Associates, we’re here to help you find the right mortgage to fit your needs. Our Adjustable Rate Mortgage options provide flexibility, lower initial payments, and potential long-term savings, making them ideal for a range of financial situations. Contact our team of mortgage professionals to learn more about our ARM products and how they can benefit you. Whether you’re a first-time homebuyer or looking to refinance, we’re ready to assist you in finding the professionals solution for your home financing needs.

FAQs About Adjustable Rate Mortgages

  • What is an Adjustable Rate Mortgage? An Adjustable Rate Mortgage (ARM) is a type of mortgage where the interest rate can change periodically after an initial fixed-rate period. The rate is adjusted based on an index that reflects the cost of borrowing in the broader economy.
  • How often does an ARM adjust? After the initial fixed-rate period, the interest rate on an ARM usually adjusts annually. However, this can vary based on the specific ARM product chosen.
  • Is an ARM better than a fixed-rate mortgage? An ARM offers lower initial rates, which may be advantageous if you plan to sell or refinance before the adjustable period starts. A fixed-rate mortgage provides long-term payment stability, which may be better for those planning to stay in their home for many years.

Secure Your Adjustable Rate Mortgage Today!

Discover how an Adjustable Rate Mortgage from Professional Mortgage Associates can provide you with flexibility and savings during the early years of homeownership. Our dedicated mortgage professionals are here to help you find the ideal solution to meet your financial goals. Get a Quote Now or call us at (818) 237-1171 to speak with one of our mortgage professionals.

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Frequently Asked Questions

Learn more about our Adjustable Rate Mortgage services

  • How often can the interest rate change with an ARM, and how does that affect my payments?

    After the initial fixed period, the rate may change annually or even more frequently, depending on the loan terms. This means your payments could increase or decrease, affecting your budget. We’ll explain the specific adjustment schedule and caps to ensure you’re comfortable with potential changes.

  • What is the initial interest rate period for an ARM, and how should I plan for future rate changes?

    The initial interest rate period can last from 3 to 10 years, depending on the type of ARM. During this period, your rate is fixed, which makes planning easy. Afterward, we recommend having a strategy in place, such as refinancing or budgeting for higher payments if rates rise.

  • How can I decide if an ARM is a good fit based on my future plans?

    If you’re planning on moving or refinancing within a few years, an ARM can save you money due to the lower initial rate. We’ll help you consider your future plans, like moving or upgrading, to see if the flexibility of an ARM aligns with your goals.

  • How does an adjustable-rate mortgage (ARM) differ from a fixed-rate mortgage?

    An ARM offers a lower initial interest rate for a set period, after which the rate can change periodically. Unlike a fixed-rate mortgage, where the interest remains the same, ARMs may adjust based on market conditions. This can mean lower payments initially but a potential increase later.

  • What are the risks associated with an ARM, and how can I manage them?

    The main risk is the possibility of rising interest rates, which could increase your monthly payment. To manage this risk, you should have a plan in case rates rise and be prepared for potential adjustments. We’ll help you understand the worst-case scenario and whether an ARM is suitable for your financial stability.

  • Why might an ARM be a good choice for me, especially early on in the mortgage term?

    ARMs are ideal if you plan to sell or refinance before the initial fixed-rate period ends. You benefit from lower initial rates, which can lead to significant savings, particularly if you don’t intend to stay in the home for a long time.

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