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Adjustable-Rate Mortgages (ARM) have a fixed interest rate for the the start of the term and a floating rate thereafter. Depending on the program, once the initial period expires, typically 1, 3, 5 or 7 years, the adjustment occurs either once every six months or once every year and fluctuates following published financial indexes.
An adjustable-rate mortgage that adjusts every six months will normally have a 1% cap per adjustment and a 6% cap over the life of the loan. The cap ‘limits’ how much the interest rate can increase. Caps vary from mortgage program to mortgage program, making it crucial for the home buyer to fully understand the terms of their specific mortgage.
Consumer Handbook on Adjustable Rate Mortgages – CHARM Booklet
Looking for additional, straightforward information about adjustable rate mortgages? The Consumer Financial Protection Bureau (CFPB) has created a concise handbook detailing key information about ARM home loans, including an overview of how ARMs work, a review of the risks associated with various types of adjustable rate mortgages, and an explanation of the various documents you’ll need to review as part of the process of obtaining an ARM.
This booklet is a great resource to help you determine whether or not an adjustable rate mortgage is right for you. You can download the CHARM booklet from CFPB here.
For Adjustable Rate Mortgages in Albany, Saratoga, Clifton Park & Beyond, Choose Maple Tree Funding!
If you are planning to purchase a home in New York State and think an adjustable rate mortgage might be right for you, turn to the mortgage experts at Maple Tree Funding. Our experienced team of loan officers can help you every step of the way. Give us a call today at 518-782-1202 or contact us for more information.