Adjustable rate mortgages (ARMs) can be a great option for new home buyers in Chicago. However, it’s important to make sure that you fully understand this type of mortgage before selecting it. The new article “
When to Consider an Adjustable Rate Mortgage” on the Equifax Finance Blog explains what an ARM is and when it’s a good idea to select it as your mortgage product.
The interest rate on ARMs will change throughout the life of the mortgage. The mortgage starts with a fixed rate period, which is usually three, five or 10 years. Once the fixed rate period ends, the interest rate can fluctuate based on market rates. Typically, the fluctuations occur on an annual basis, and are predetermined in the mortgage closing documents.
If you’re purchasing a new home and are considering an adjustable rate mortgage, use these tips to make sure that you’re making the right decision:
- Determine how long you plan to live in your home and whether or not you plan to pay off the loan during that time period.
- Your future income is impossible to predict, but it’s important to consider whether it may change and make paying a mortgage with a higher interest rate harder.
Deciding which type of mortgage loan is right for you can be a challenge. To learn more about ARMs, read the full article on the Equifax Finance Blog. Then, reach out to a trusted lender to learn more.