1 / 7

Adjustable-Rate Mortgage (ARM): What It Is and Different Types

This excerpt describes the fundamentals of an ARM.

Alex388
Download Presentation

Adjustable-Rate Mortgage (ARM): What It Is and Different Types

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Adjustable-Rate Mortgage (ARM): What It Is and Different Types

  2. What Is an Adjustable-Rate Mortgage (ARM)? ARM fundamentally refers to a home loan with a variable rate of interest. With an ARM, the initial interest rate is fixed for a specific period. After that, the interest rate applied on the outstanding balance resets periodically, at yearly or even monthly intervals.

  3. How Adjustable-Rate Mortgages (ARMs) Work An ARM is where the rate fluctuates based on market conditions. This means that you will benefit from falling rates and also run the risks if the rates increase. There are two different periods to an ARM – one is fixed and the other is adjusted.

  4. Types of ARMs An adjustable-rate mortgage comes in three forms. • Hybrid ARM offers a mix of fixed and adjustable-rate period. • Interest-Only ARM means only paying interest on the mortgage for a specific time-frame. • Payment-Option ARM comes with several payment options.

  5. Advantages and Disadvantages of ARMs An adjustable-rate mortgage comes with many benefits and drawbacks. • The most obvious advantage is that a low rate will save you money. • The most obvious disadvantage of an ARM is that the interest rate will change.

  6. Is an ARM Right for You? An ARM can be a smart financial choice if you expect to keep the loan for a limited period of time and will be able to handle any rate increases in the meantime. An ARM is perfect for; • Folks who intend to hold the loan for a short period of time • People who expect to see a positive change in their income • Individuals who can and will pay off the mortgage within a short timeframe

  7. Thank You Visit: www.altfn.com

More Related