Adjustable Mortgage Loans
Conventional Conforming loan transactions are conventional mortgage loans which conform to Fannie Mae/Freddie Mac guidelines. With an Adjustable Rate Mortgage (ARM) Loan, your interest rate changes at specific period mentioned in your Mortgage Promissory Note, so the amount of your monthly payment could increase or decrease. Quite often, an ARM Loan provides a lower initial rate compared to fixed rate loans.
Benefits of Adjustable Rate Mortgage Loans
- Usually a lower initial interest rate and payment
- Loan terms vary to meet your needs
- 3, 5, 7 and 10-year adjustable mortgage terms
Things to Consider
- You’re planning to be in your home less than 5 or 10 years
- You expect interest rates to remain stable or decline during the life of your loan
- You want a lower initial monthly payment and don’t mind a variable
Conventional Conforming adjustable rate mortgage programs are:
- 3/1 Libor – fixed for the first three years, then rolls to a one year ARM for the remainder of the term;
- 5/1 Libor – fixed for the first five years, then rolls to a one year ARM for the remainder of the term;
- 7/1 Libor – fixed for the first seven years, then rolls to a one year ARM for the remainder of the term.
The Conforming ARM program is a 30 year conforming conventional loan that is fixed for the initial 3, 5, 7 or 10 years and then coverts to a 1 year ARM for the remainder of the term. It is available with an interest only option where during the first 120 months, the mortgage payment consists of an interest only payment (plus applicable escrow payments for taxes and insurance). Subsequent to the interest only period, payments will consists of principal and interest and will adjust annually at the time of interest rate adjustment.
Our Certified Mortgage Planner Specialists will guide you through each stage of the process and provide you with expert advice along the way. Whether you are Buying a home or Refinancing your current mortgage we are committed to making the home loan process clear, informative, and simple. At Guardian Mortgage, we understand that buying a home is equally big decision as refinancing your current mortgage. That’s why we are committed to providing you with the information you need to make well informed decisions.
