Adjustable Rate Mortgage
Depending on your situation, an ARM may be right for you.
With an Adjustable Rate Mortgage, you will get the lowest rate we offer and save thousands of dollars over a traditional fixed rate mortgage during the initial fixed rate period. The initial interest rate is lower and there is a cap rate, so as it adjusts, it can’t adjust astronomically.
Most buyers prefer to have traditional amortized loans fixed on set interest rates for the entirety of the loan; however, there are several reasons that an Adjustable Rate Mortgage would make sense based on your situation. These reasons include:
- Desire to get into a house, but need lower payments to start
- Know that you plan to move or refinance inside the next 5 to 10 years
- Want the lowest rate available or expect an increase in income
If any of those statements apply to you, then the Adjustable Rate Mortgage, otherwise known as an ARM, may be right for you.
The interest rate is determined by adding a margin rate to the index rate. Adjustment periods can be monthly, every six months, every year or other options may be available.
Hybrid ARM
The Hybrid ARM is a popular choice when selecting an ARM. A Hybrid ARM offers an initial fixed rate period that is followed by the adjustable rate period. Here are three popular types of Hybrid ARM conventional loans:
- 3 / 1 ARM. This loan is fixed for 3 years, and then it begins to adjust annually for the remaining 27 years.
- 5 /1 ARM. This loan is fixed for 5 years, and then it begins to adjust annually for the remaining 25 years.
- 7 / 1 ARM. This loan is fixed for 7 years, and then it begins to adjust annually for the remaining 23 years.
Contact Maui Mortgage Team to see if this loan is right for your unique situation.
How to Get Started
To select an Adjustable Rate Mortgage, apply online, or contact us today: 808-270-2775 or toll-free 1-877-270-2542