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Adjustable Rate Mortgages (ARMs) Minnesota

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

Acme Mortgage Corp
(763) 566-1669
5701 Shingle Creek Pkwy
Minneapolis, MN

Wells Fargo Home Mortgage - Bloomington
(612) 316-2952
7900 Xerxes Ave. S.
Bloomington, MN

MFG Mortgage Services
(612) 766-9000
901 Marquette Ave. S., Ste. 2680
Minneapolis, MN

Wells Fargo Home Mortgage - Minneapolis
(612) 752-5761
733 Marquette Ave., Ste. 203
Minneapolis, MN

Advisors Mortgage
952-484-8875
2121 Cliff Drive
Eagan, MN

1st Metropolitan Mortgage
651-770-2033
2399 Ariel St N
St. Paul, MN

M&I Bank
612-798-3339
6625 Lyndale Av. S.
Minneapolis, MN

Kraus-Anderson Mortgage Company
(612) 332-7281
523 South Eighth St.
Minneapolis, MN

Advisor Mortgage Services LLC
(612) 378-7016
43 Main St SE
Minneapolis, MN

Amcap Mortgage & Financial Inc
651-747-1420
6993 35th St N
St. Paul, MN

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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

Acme Mortgage Corp

(763) 566-1669
5701 Shingle Creek Pkwy
Minneapolis, MN

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