Adjustable Rate Mortgage (ARM)

An adjustable rate mortgage (ARM) is a loan where the interest rate can change (usually in relation to an index interest rate). Your monthly payment will go up or down depending on the loan’s introductory period, rate caps, and the index interest rate.

Adjustable rate mortgage features:

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Lower interest rates than 30-year fixed rate mortgages

Low interest rates for the introductory period

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Lower monthly payments during introductory period

Maximize cash flow while your interest rate is low during the introductory period

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Adjustment rate caps

Limits the amount of rate change that can occur in certain time periods

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Refinance options at the end of introductory period

What’s the difference between a fixed rate mortgage and an adjustable rate mortgage (ARM)?

With a fixed rate mortgage, the rate and payment remain the same over the entire term, or length, of the loan. With an adjustable rate mortgage, the rate and payment remain fixed for an introductory period, after which the rate and payment may periodically adjust up or down. Many ARMs will start with a lower interest rate than fixed rate mortgages, then adjust once the introductory period is over. The introductory period could be a few months or a few years. For example, for a 5/1 ARM, the rate and payment are fixed for the initial 5-year period, after which they may adjust up or down every year until the end of the loan term.

Speak with a loan officer or visit one of our local branches to learn more about the difference between a fixed rate and ARM before deciding which loan option is right for you.

Is an adjustable rate mortgage right for you?

If you plan on moving or selling your home within 5 years, an adjustable rate mortgage might be a good fit for you. You can benefit from the lower interest and lower monthly payments during the introductory period, then sell your home before the rate adjusts. In general, and when possible, you’ll want to be out of the ARM before the interest-rate adjustment period occurs. Before deciding if an ARM is right for you, speak with one of our loan professionals.

Why choose EverLEND Mortgage for your adjustable rate mortgage?

We’re experts with deep experience in underwriting, processing, and closing on adjustable rate mortgages. Let our professionals guide you through the experience!

This is not a commitment to make a loan, nor should it be construed as lending advice. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet LTV requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines, and are subject to change without notice based on applicant’s eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over life of loan. Reduction in payments may reflect longer loan term. Terms of the loan may be subject to payment of points and fees by the applicant. EverLEND Mortgage Company is an Equal Housing Lender NMLS# 1100621.