As Rates Rise, Is an Adjustable Rate Mortgage a Good Idea?
It’s pretty
tempting – that that lower rate on the ARM in a rising interest rate
market. Is it a good idea? That depends…read on.
An ARM starts
with an initial period that has a fixed interest rate. Different loan terms vary and the low rate
can usually last from one year to ten years.
After the introductory period expires, the interest rate moves up and
down with another interest rate called the index. Most ARMs have one of three major indexes:
one year treasury yield, COFI, or LIBOR.
ARMS also have limits, or caps, that restrict the amount rates and payments
can change.
The Easterbrook Team
916.850.6050
"We Make the Loan Process Easy!"
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