Why Choose an Adjustable-Rate Mortgage?
ARMs can provide lower initial interest rates and initial monthly payments than a fixed-rate mortgage, giving you better affordability due to lower upfront payments.
An ARM offers greater flexibility, making it ideal for borrowers anticipating big changes. For example, if you plan to move or sell your house, you can enjoy a lower, fixed-rate for a set period, then sell before the adjustable phase begins.
ARMs limit the amount of rate change that can occur in certain periods of time when the rate becomes variable. There is a cap on how high or low the interest rate can go over the life of the loan.
Payments Can Decrease
Falling interest rates can drive down the index against which your lender benchmarks your ARM. If this occurs after your fixed term of 7 or 10 years, your monthly payment will drop. On the other hand, your payments could also increase based on the index.
Low Down Payments
A down payment is the amount of money that the homebuyer pays out-of-pocket towards purchasing the home With Midland States Bank, our ARMs require as low as 5% down.