ADJUSTABLE RATE MORTGAGES (ARMS)

Why Choose An Adjustable Rate Mortgage (ARM)?

Interest rates on adjustable rate mortgages are typically lower than rates on fixed loans, which means an ARM may help you save thousands of dollars over the life of your loan. ARMs are also attractive options because they often mean lower monthly payments and are easier to qualify for.

Adjustable = Short Term Fixed

Though it may seem like it from their name, ARM rates don’t fluctuate drastically or often. Adjustable rate mortgages are fixed, but for just three to ten years (a much shorter time period than standard loans). The shorter fixed time period, the lower the interest rate will be.

Could You be Moving in 5 – 7 years? Think ARM!

If you plan to move in the next few years, consider an adjustable rate mortgage. Why pay extra for rate security you don’t need? If you are thinking about getting a bigger home in a few years or downsizing when the kids move out, you may want to refinance your higher rate 30-year fixed loan to a cost-saving ARM.

  •       IS THERE A LIMIT ON HOW MUCH MY INTEREST RATE COULD CHANGE?
  • Yes. All ARM loans Cornerstone home Lending, Inc. sells have limits (known as caps) to the possible rate increase at the end of the fixed term. The biggest possible change is a 6% increase over the starting rate. Learn more about rate caps.

    An important note: With an adjustable rate mortgage, the interest rate does not necessarily go up at the end of the fixed term. Rates are determined by the economy — if interest rates are lower at the end of the ARM’s fixed time period, your mortgage may be adjusted to fall in line with these lower rates.

  •       WHEN IS AN ARM THE WRONG CHOICE?
  • If the idea of a future rate increase is a worry to you (or your spouse) stick with a traditional 30-year fixed interest rate mortgage. You’ll sleep better at night — the savings may not be worth the stress for you.

    When buying a home and choosing a mortgage, it’s important to buy only what you can afford. Adjustable rate mortgages work best when used to pay your home loan off sooner, not when used to purchase a home that is out of your price range.

ARM Questions? Contact Cornerstone Home Lending!

910.452.7283
To discuss ARM loans with one of our knowledgeable loan officers, contact Cornerstone today! We’ve earned the trust of homeowners in the Triangle, the Triad the Outer Banks, Western North Carolina, Virginia Beach, Rehoboth Beach, the Eastern Shore of Maryland, the Eastern Shore of Virginia, and more – Let us earn yours! Cornerstone also offers mortgages in Tennessee, South Carolina, Texas, and Florida. Call today!

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