Adjustable Rate Mortgages
Start with a low interest rate.
If you like the idea of an initial interest rate that is typically lower than a Fixed Rate loan, an Adjustable Rate Mortgage (ARM) may be the just the right fit. It’s especially attractive to those who plan to own their property for just a few years, or if you are expecting your income to grow.
ARM interest rates are tied to an index and adjusted at regular intervals. As market conditions change, your interest rate may go up or down.
Who is best suited to an ARM?
Those who plan to sell or refinance within a few years of purchase. What’s the advantage? You get the ARM’s low initial rate and move before it goes up. Those who buy a home when mortgage rates are high. An ARM can make the first few years of your mortgage more affordable. Those who expect household incomes to increase. The ARM’s initial low rate can be a budget saver. Then when rates increase, your income may be on track to accommodate the change.
What are the benefits of an Associated ARM?
- Lower initial interest rates than most fixed mortgages
- Rate protection up to a full 10 years with our 10 year ARM Potential for some ARM’s to convert to a fixed rate mortgage
- Preferred rates and discounts on Associated CD’s, checking and money market accounts
Is an ARM a good fit? Some questions to consider:
- What is the initial rate and how long is it in effect?
- How often does the mortgage interest rate adjust? The longer the time between adjustments, the more predictable your monthly payments.
- Are there rate caps?
- How much can the interest rate rise at each adjustment?
- How much over the life of the loan?
- Can an ARM convert to a fixed rate mortgage?