We will respond promptly with an analysis of what mortgage program, product and loan amount you qualify for, based on the information you provide. There is no charge for this service. This makes it easier to establish financial plans and budgets, as the only changes that can occur are in the amounts paid for taxes, insurance, and for removal of Mortgage Insurance, if there is any. To get this peace of mind, the Borrower always pays a higher interest rate for a Fixed Rate than an Adjustable Rate Mortgage. However, this does not always mean qualifying for a more expensive property, just because the starting interest rate is lower.
Interest rates change periodically over the life of the loan, which changes the monthly payment.
These changes can take place monthly, every 3 months, every 6 months or annually. This make budgeting more difficult, but this is ideal for Borrowers who do not plan to stay in a house more than a few years, are buying during a time of falling interest rates, Borrowers who anticipate increases in income that will offset mortgage payment increases, and for risk tolerant Borrowers, who are willing to gamble on rate swings, refinancing whenever rates drop or on rate adjustment anniversaries. ARM loan rates are based on indexes plus margins . A margin is added to the index, and that total is the fully indexed rate for an Adjustable Rate Mortgage. This fully indexed rate is almost always higher than the start rate , and accounts for the probability that ARMs will increase at their first change date , and they will often continue to go up.