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Adjustable Rate Mortgages (ARM)

An adjustable rate mortgage typically starts with a lower interest rate than fixed rate mortgages. However, your interest rate and payments are periodically adjusted up or down as the index changes. In the event these plans change, you may refinance your ARM to a Fixed Rate mortgage to avoid fluctuating monthly payments.

One example is the 5/1 Adjustable Rate Mortgage

  • Interest rate is fixed for the first five years
  • Principal and interest payment would remain the same for the first five years
  • After five years, rate and payment changes each year based on an underlying variable index and fixed rate margin
  • At any time, you have the option to refinance into a fixed rate mortgage
  • This may be an excellent option to consider if you intend to sell and move within five years

All home equity loans and lines of credit are subject to program eligibility, underwriting and collateral requirements and approval, including credit approval.