If you plan to move within seven years, then adjustable-rate loans are usually cheaper. An adjustable rate mortgage, known as an ‘ARM’, is a loan that typically offers a lower initial interest rate than most fixed rate mortgage loans. The interest rate, however, can change periodically and is usually tied to an index. The monthly payment will go up or down accordingly.
The tradeoff to the initial lower monthly payment may be a higher monthly payment in the future should the rate of your ARM increase. It is important that you weigh the risk. Often times, an ARM may be well-suited for borrowers looking to finance for shorter terms of 3-7 years, for example.
Please consult with your Mortgage Loan Officer for additional information.
Purchase of land and intended for construction of a residential property within the foreseeable future. Maximum financing is 65% of the sales price or appraised value whichever is less.