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Adjustable Rate Mortgage

An adjustable rate mortgage, commonly known as an ARM, is a mortgage that has an interest rate which can vary over the life of the mortgage. Adjustable rate mortgages present both opportunities and challenges for homeowners. If you refinance your home or consolidate your debts and mortgage correctly, you could save money substantially by taking advantage of lower interest rates. On the other hand, if you're not careful about how you refinance, you could do more harm than good in the long run.

Length of Ownership

Lenders often advise homeowners to take out adjustable-rate mortgages if they plan to live in their homes for just a few years. With an ARM you can generally obtain a cheaper rate than with a fixed rate mortgage. The key to lowering your payments is to lock in a lower rate for your ARM, so that you pay less every month. Paying a little extra on the principal each month can also help from a psychological perspective.

Here to Help

Whether you want an ARM or a fixed rate mortgage, America's Lending Partners can help you find a great low rate. ALP's free, no obligation service can provide you with up to four home loan offers.

If you're unsure whether an ARM is right for you, speak to an experienced mortgage planner, who can provide you with a no obligation mortgage plan, based on your long-term financial goals.