Most buyers know that first-year interest on Adjustable Rate Mortgages (ARMs) is typically lower than the interest on available fixed-rate mortgages. This makes ARMs easier to qualify for, but also requires that borrowers have some understanding about how such loans work, because there are significant details associated with the low first-year rate.

First, check to see how long the low rates offered on the ARM are guaranteed. After that period of time, the rates can go up two points a year to a typical rate cap of six points over the life of the loan. Lenders will usually require borrowers to qualify for a mortgage loan that is several percentage points above the actual initial rate charged on the ARM. This is intended to keep borrowers from becoming overburdened by debt. Some lenders may charge special fees or caps which can increase the cost of the loan. If you think that an ARM may work for you, it is a good idea to shop around.

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Julie Hoelscher
Crosswind Realty
3219 Saint Genevieve Drive
Leander, TX 78841
512-789-7541
Fax: 512-697-2825
Julie@Julie-Cares.com

I offer a unique ability to connect with my clients, who often become friends. I will take your concerns, expectations and needs to heart. You can trust my professional guidance and expertise on your real estate journey. Please feel free to contact me by phone or by email. I will get back to you quickly. I look forward to working with you soon!