Why is an adjustable rate mortgage (ARM) beneficial?

An adjustable rate mortgage (ARM) can be beneficial for those in Kansas who don’t have a steady income, or those who may be planning to move in the near future. An adjustable rate mortgage means that your interest rate can change over time due to market conditions, so if rates go down, your monthly payments could drop too. This can help with cash flow, especially in uncertain economic times. Also, these mortgages usually have a lower initial interest rate than a fixed-rate loan, which means lower monthly payments at the outset. This can be very helpful for those who have limited funds and/or need to make a large down payment. Finally, ARM’s have an adjustable period (or period of time when your interest rate stays the same). This can provide homeowners with more flexibility in budgeting, since they know when the rate may change and can plan accordingly. Overall, adjustable rate mortgages can be a sound decision for those looking to purchase or refinance a home in Kansas. Knowing the terms of the loan and the potential changes in interest rate is essential, however, as it could leave some borrowers with higher costs than originally anticipated.

Related FAQs

What is a home equity line of credit (HELOC)?
What factors determine the mortgage rate?
Can I get a mortgage if I am retired?
What is a reverse mortgage?
What is the best way to shop for a mortgage?
What is the difference between fixed-rate and adjustable-rate mortgages?
What is mortgage insurance?
How is my mortgage rate determined?
What is the maximum mortgage amount I qualify for?
What is private mortgage insurance (PMI)?

Why is an adjustable rate mortgage (ARM) beneficial?

Related FAQs

Related Blog Posts