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Adjustable Rate Mortgages (ARMs) Michigan

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

Able Mortgage Group
313-340-1090
18984 Livernois Ave
Detroit, MI

Amstar Mortgage Corp
313-420-0223
950 Marston St
Detroit, MI

Bretlin Home Mortgage
313-864-0963
7631 W Mcnichols RD
Detroit, MI

First Mortgage Fund
313-872-6242
2843 E Grand Blvd
Detroit, MI

Sagetips LLC
231 759 1229
2380 Estes Street
Muskegon, MI

Todd Strobel CMPS
616-464-4400
2828 Kraft Ave SE
Grand Rapids, MI

American Mortgage Centers
517-586-4030
5840 Sterling Drive
Howell, MI

Infinity Mortgage
313-245-9931
11175 Balfour RD
Detroit, MI

American Nationwide Mortgage Company
231-421-3200
104 South Union Street
Traverse City, MI

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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

Able Mortgage Group

313-340-1090
18984 Livernois Ave
Detroit, MI

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