Adjustable Rate Mortgages (ARMs) Arizona

With an Adjustable Rate Mortgage (ARM), the interest rate changes periodically, usually in relation to an index, and payments may go up or down accordingly.

Local Companies

Cornerstone Financial Services
623332-3714
7575 E. Redfield Road #213
Scottsdale, AZ
American Trust Insurance Brokers
602882-2587
7134 W. Planada Lane
Glendale, AZ
Reverse Mortgage Concepts
480-306-4432
9915 E Bell Rd Suite 114
Scottsdale, AZ
American Home Loans
480-385-2741
6750 E Camelback RD
Scottsdale, AZ
Sun State Home Loans
480-585-1616
8765 E Bell Rd
Scottsdale, AZ
Centric Mortgage
480-607-7888
8655 E Via De Ventura
Scottsdale, AZ
Reverse Mortgage Concepts
480-306-4432
9915 E Bell Rd
Scottsdale, AZ
Mortgage Concepts, LLC
480-306-4432
7310 N 16th Street
Phoenix, AZ
Nova Home Loans
480.614.6409
8800 East Raintree Dr. Ste 180
Scottsdale, AZ
State Farm Ins. - Maria Casebeer
623412-2770
8392 W. Thunderbird Rd. # 101
Peoria, AZ

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With a fixed-rate mortgage, the interest rate stays the same during the life of the loan. With an Adjustable Rate Mortgage (ARM), the interest rate changes periodically, usually in relation to an index, and payments may go up or down accordingly.

 

 

Adjustable Rate Mortgages

At-A-Glance

Pro Con
Lower initial interest rates Lower rate means you potentially assume more risk
If interest rates remain steady or decrease, could be less expensive over time If interest rates increase, you’ll be faced with higher monthly payments in the future

 

 

TIP:  Before deciding that an ARM is right for you, ask yourself these questions:

  • Is my income likely to rise enough to cover higher mortgage payments if interest rates go up?
  • Will I be taking on other sizable debts, such as a loan for a car or school tuition, in the near future?
  • How long do I plan to own this home? (If you plan to sell soon, rising interest rates may not pose the problem they do if you plan to own the house for a long time.)
  • Can my payments increase even if interest rates generally do not increase?


The Basic Features

 

The Adjustment Period: With most ARMs the adjustment period occurs every one, three or five years, resulting in a change in your interest rate and monthly payment.

The Index: Most lenders tie ARM interest rate changes to changes in an index rate. These indexes usually go up and down with the general movement of interest rates, making your monthly payment amount rise or fall accordingly.

The Margin: To determine the interest rate on an ARM, lenders add to the index rate a few percentage points called the margin. The amount of the margin can differ from one lender to another, but it is usually constant over the life of the loan.

This information is adapted from "Consumer Handbook on Adjustable Rate Mortgages" published by the Federal Reserve Board and the Office of Thrift Supervision.

 

Published on January 25, 2007

Read full article at realestate.com

Featured Local Company

Cornerstone Financial Services

623332-3714
7575 E. Redfield Road #213
Scottsdale, AZ

Regional Articles
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