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Everything You Need to Know About an ARM Loan
October 23, 2024
Written by Alvin Newton
When exploring home loan options, an Adjustable Rate Mortgage (ARM) often stands out as a top choice for buyers seeking flexibility and potential cost savings. Known for its lower introductory rates and reduced down payment requirements, an ARM loan is an appealing option for both first-time buyers and experienced homeowners looking to save money. Whether you’re purchasing a new home or refinancing an existing mortgage, understanding the details of an ARM loan can help you make an informed decision.
What is an ARM Loan?
An Adjustable Rate Mortgage (ARM) is a type of home loan where the interest rate is variable after an initial fixed period. During this introductory period—typically lasting five, seven, or ten years—the interest rate remains fixed. After that, the rate adjusts periodically based on market conditions, which can cause your monthly mortgage payments to increase or decrease.
ARM loans often feature lower down payment requirements, do not require private mortgage insurance (PMI), and can offer loan terms of up to 30 years, making them a flexible option for a wide range of borrowers.
How Does an ARM Loan Work?
The introductory period for an ARM loan can last anywhere from 5 to 10 years. During this time, borrowers benefit from a fixed interest rate, often lower than the rates for fixed-rate mortgages. Once this period ends, the loan's interest rate adjusts based on a benchmark index that reflects the current conditions in the lending market. These adjustments can happen annually, every five years, or even every month, depending on the specific terms of your ARM loan.
Contact Me For More Details
Contact Me For More Details
Alvin Newton
Residential Mortgage Loan Officer
NMLS #2222360 DRE #01858045
619-987-6987 Alvin@AlvinNewton.com
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Alvin Newton: NMLS #2222360 DRE #01858045
Moose Mau: NMLS #411962 DRE #02084078
C2 Financial Corportation: NMLS #135622 DRE #01821025
Visit the C2 Financial Corporation website
Visit the NMLS Consumer Access website
This licensee is performing acts for which a real estate license mortgage broker license, mortgage lender license, mortgage lending license, mortgage loan originator license, mortgage license is required. C2 Financial Corporation is licensed by the California Department of Real Estate, Broker # 01821025, Alabama State Banking Department, Broker # 23303, Arizona Department of Financial Institutions, Broker # 919209, Arkansas Securities Department, ASD# 129945, Colorado Division of Real Estate, NMLS# 135622, Florida Office of Financial Regulations, OFR# MBR3519, Hawaii Department of Financial Institutions, Broker# HI-135622, Idaho Department of Finance, Broker license # MBL-9475 Michigan Department of Insurance and Financial Services, DIFS# FL0023565, SR0023566, Mississippi Department of Banking and Consumer Finance, New Mexico Financial Institutions Division, Oklahoma Department of Consumer Credit, license# MB014489, Oregon Division of Finance, DFR# ML-4917, South Carolina Department of Consumer Affairs; NMLS# 135622.
Loan approval is not guaranteed and is subject to lender review of information. All loan approvals are conditional and all conditions must be met by borrower. Loan is only approved when lender has issued approval in writing and is subject to the Lender conditions. Specified rates may not be available for all borrowers. Rate subject to change with market conditions. C2 Financial Corporation is an Equal Opportunity Mortgage Broker/Lender. The services referred to herein are not available to persons located outside the state of AL, AR, AZ, CA, CO, FL, HI, ID, MI, MS, NM, OK, OR, SC.
C2 Financial Corporation is approved to originate VA and FHA loans, and has the ability to broker such loans to VA and FHA approved lenders. C2 Financial Corporation is not acting on behalf of or at the direction of HUD/FHA or the VA.
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