Own, with options: How ARMs help short-term homebuyers
For anyone who’s tired of signing rent checks, homeownership has a ton of upside: more space, more quiet, and a stronger financial future. The downside of renting is not just that the space is not really yours, but that your money isn’t really yours—and all those empty rent checks can really add up over time. But making the jump to owning can mean a long time commitment that many people just can’t make. Luckily, there are financing options, like Adjustable Rate Mortgages, that help serve homebuyers on a shorter timeline.
Not sure where you’ll be for the next 30 years?
A lot of people want to ditch renting in favor of owning, but get scared off by the fixed commitment of a 30-year mortgage. They might not see themselves living in one place for that long, and don’t want to get boxed in. Plus, the whole mortgage process can seem overwhelming, with reams of complicated paperwork to sign, delays, and hoops to jump through. We’ve already proven that’s not the case but there’s still the question of flexibility.
Own, with options
An Adjustable Rate Mortgage, or ARM, provides buyers the opportunity to become a homeowner, but with a greater freedom and flexibility. ARMs are ideal for people who are looking to own, but on a shorter time frame. That might include folks who might have to move or relocate often for work, single homebuyers who are looking for a starter home, or parents planning to expand their family in the near future. ARMs can also be a good option for homeowners who are approaching retirement age and plan on selling their home in the next 5-7 years. Utilizing an ARM can also be beneficial for buyers taking on a jumbo mortgage, since securing a low rate is especially desirable and can help make monthly payments more manageable.
A-B-Cs of ARMs
ARMs are just like other mortgage options, except they have an interest rate that changes after a fixed amount of time—usually 5-7 years. Adjustable Rate Mortgages typically offer lower interest rates and lower monthly payments than a fixed rate mortgage. After the initial fixed period ends, the rate could be subject to change every year thereafter for the duration of the loan term (typically 30 years), and your monthly mortgage payments will adjust accordingly (with rates and payments often increasing).
If your top priority is a low monthly payment or you don't plan on staying in your home for more than 5-7 years, an adjustable rate mortgage (ARM) could be right for you. If flexibility is your top priority, this loan can be a viable alternative to a 15 or 30-year fixed rate mortgage.
Be a homeowner, on your timeline
With an Adjustable Rate Mortgage, you can make the jump to owning on your terms. You can have a place for a few years, then have the freedom to move on when life, family or work comes calling.
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