At Precision Home Loans, we offer a variety of different ARM products to suit your needs.

What is an adjustable rate mortgage

Adjustable Rate Mortgages (ARMs) are home loans where the interest rates can change during the loan’s life. This makes your monthly payment change too. ARMs are named like 5/1 or 7/1. The first number is how many years the starting interest rate stays the same. The second number is how many years the rate can change after the fixed time. For instance, with a 5/1 ARM, the first 5 years have a steady interest rate. After that, the rate might change every year.

Top Reasons To Get An Adjustable Rate Mortgage

Possible Long Term Savings

Because ARMs are tied directly to the market indices, the payments are often lower than a fixed rate loan.

Initial Cost Savings

Many ARMs have an initial period with a low interest rate. This rate is far lower than fixed-rate mortgages, which equals lower monthly payments.

ARM Eligibility Requirements

Below are the main factors that are evaluated when applying for an ARM:

Income To Debt Ratio

In order to qualify for an ARM loan, your income must be sufficient enough to cover your principal and interest at the maximum interest rate after the fixed rate period, plus taxes, insurance, mortgage insurance (if applicable) and all other debts.

Credit Score

Your credit score shows your history of handling debt and is the strongest indicator of whether or not you will pay your mortgage on time. High credit scores may result in lower interest rates and greater financing options.

Job History

Your job history is also important in qualifying you for a loan. Lenders want to see that you have a consistent work history before offering you financing.