If you’re thinking about buying a house, you need to know that there are several types of mortgages available for consumers – and one of them is an adjustable-rate mortgage.
But what’s an adjustable rate mortgage, and why do some people choose them?
What is an Adjustable Rate Mortgage?
An adjustable-rate mortgage (commonly called an ARM) is one in which your interest rate changes throughout the life of your loan. Usually, there’s a fixed-rate period (usually 5, 7 or 10 years) during which the rate stays the same. After that, your interest rate changes based on what’s happening with the rates new homebuyers are paying. Your payments could go up or down, depending on the current rate.
Advantages of Adjustable-Rate Mortgages
- Have lower rates and payments early in your loan
- Get lower rates without having to refinance (when interest rates are lower to the public)
- Save money you’re not paying in interest and pay down the principal on your home (or make other investments with it)
Disadvantages of Adjustable-Rate Mortgages
- Rates and payments can rise a lot over the course of your loan
- Your first adjustment may be large (and unexpected)
- Adjustable-rate mortgages can be complicated and tough to understand
Are You Buying a Home in Charlotte?
If you’re moving to Charlotte, we can help you find the perfect home. Give us a call at 704-608-2794 or get in touch with us online to let us know what you’re looking for. We’ll help you find it!
Check out our:
- North Charlotte homes for sale
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- Charlotte area Luxury homes for sale
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Looking outside the city? Check out:
- Ballantyne homes for sale
- Harrisburg homes for sale
- Steele Creek and Lake Wylie homes for sale
- Concord homes for sale
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