Adjustable rate Mortgages

Exploring the Pros & Cons of Adjustable Rate Mortgages
(ARMs 💪)

Understanding Adjustable Rate Mortgages (ARMs)

Deep Diving into the world of arms

Hey there, future homeowner or curious cat! You've probably heard some chatter about mortgages and came across the beast known as the Adjustable Rate Mortgage, or ARM for short. Sounds like a limb, but trust us, it's not that kind of arm. This elusive ARM has its ups and downs, and we're here to break it down for you, no finance degree required. 😉

What on Earth is an Adjustable Rate Mortgage (ARM)?

Before you start picturing robots and sci-fi, let's get this straight: an ARM is a type of loan where your interest rate does this fun thing called 'adjusting.' (Crazy, right?) That means over the life of your loan, how much you pay each month could morph like a financial chameleon, depending mostly on market trends, which, unlike your social media feed, you can't scroll past.

Understanding ARMs is crucial because, hey, you might save a bundle (or not). And saving money is almost as satisfying as finding cash in your old jeans, trust us.

Pros and Cons of ARMs

The Sunny Side Up

Pro-tip:
You start with a lower interest rate which is like starting a game on the easiest level - it's smooth sailing, at least for a little while.
Big Brain Move:
You could save some serious moolah, especially if you're planning to sell before the rates adjust upwards. Flip that house like a pancake!

The Stormy Weather

Oh Snap:
Rates can jump up faster than your heart rate on a rollercoaster. Your monthly payments could puff up bigger than a soufflé in a hot oven if interest rates take a hike.
Inconvenient Truth:
Uncertainty is fun for movies, not so much for monthly payments. You gotta be ready for whatever the economic winds blow your way.

Key Details about ARMs

How Do ARMs Actually Work?

Imagine taking a road trip where sometimes you speed down the freeway, and other times you're stuck in traffic. That's kinda like ARM rates – they change. (Hello, variety!)

A traditional fixed-rate mortgage is like cruise control - same speed, all the time, no surprises. (Never better...never worse.)

Fixed-Rate vs ARM Showdown

Do you like stability and long cozy nights by the fire with the same mortgage payment each month? Fixed rate's your jam. Want to live on the edge with potentially lower payments (or with a "financial edge")? ARM’s got your back.

Don't be caught off guard if the rates soar, leaving you with a bill that resembles a phone number.

Interest-only ARMs

For real, this is an ARM where you only pay the interest for a bit. Think of it as eating only the toppings off your pizza. Great at the moment, but sooner or later you're gonna have to deal with the crust.

Now that the warning disclaimer is out of the way, let's talk reality...

It's not exactly that simple. The truth is, there are plenty of reasons to utilize an interest-only adjustable mortgage. The key is choosing the right type of ARM loan that has the right features and terms for your needs.

(Full disclosure: There's one that I personally feel is head and shoulders above ALL other loan programs. Check out our "UnMortgage" page for more details.)

Differences Between Fixed and Adjustable Rates

It's Like Picking a Movie Genre

Choosing between these two is like deciding between a mystery thriller and a feel-good rom-com. With a fixed rate, you know exactly what you're getting—no plot twists, just happily-ever-after predictability. ARM's are for those who enjoy a little suspense. Will you save big, or will the rate spike set your wallet on fire? Tune in to find out!

Frequently Asked Questions

Q: Should I consider an ARM?

A: It depends. (Was that not obvious?) If you're planning on moving within a few years or think interest rates may decrease, then it might be worth considering an ARM. But if stability and consistency are your jam, stick with the fixed rate.

Q: How often do rates adjust?

A: ARM's typically have an initial fixed-rate period of 5, 7, or 10 years. After that, they can adjust once a year based on market conditions. So buckle up for potential changes each year! 🎢

(There are other adjustable rates that can adjust as often as every month... and they're better! But that's a story for another day.)

Q: How do I know if an ARM is a good fit for me?

A: As with most things in life, there's no one-size-fits-all answer. It ultimately depends on your personal financial situation and goals. It's best to talk to a mortgage professional who can help you weigh the pros and cons and determine if an ARM is the right choice for you.

Whew! You made it through the ARMs labyrinth, and you're probably feeling like a mortgage whisperer by now. Remember, there's no shame in calling for backup. Industry pros like our very own Jason Iacovelli suggest "knowing your staying time and how much financial rollercoastering your stomach can handle is vital to making the best decision." (Always good to know.)

Don't be shy—grab that expert advice like it's the last slice of pizza at a party. And hey, scroll down for some pretty snazzy visuals that map out everything we just gabbed about.

Keep wearing that smarty pants badge with pride, and check back in for more 'oh, so that's how it works' moments. And remember, whether you go ARM or fixed, may the mortgage odds be forever in your favor!

Ready to make the leap from endlessly scrolling through Zillow to holding those shiny new keys?

Click that perky little "Get Started" QR Code (you know you want to), or go old-school and give us a ring at 919.646.6869. Because calling someone is so... intimate. Scheduling appointments is the new flirting, didn’t you know? 😉

About Jason Iacovelli

Your Favorite loan officer's favorite loan officer

With over 20 years in the mortgage industry and a rich history of roles—from loan officer to branch manager—Jason has seen thousands of mortgage deals through to closing. A globe-trotter since childhood, he has roots in South Carolina but has called many places home, including Germany and New York, before settling in Cary in 2014.

At home, Jason is a dedicated husband to Valerie and doting father to two. When he's not closing deals or enjoying family time, he's likely on the golf course, catching up on films, working out & practicing mixed martial arts (a hobby he absolutely loves but was absolutely terrible at).

Local Contact Info

Jason Iacovelli
Sr. Loan Officer

NMLS #3370
3149 Zebroid Way
New Hill, NC 27562

Call or Text: 919-646-6869

jason@themortgage.app

3149 Zebroid Way, New Hill, NC 27562, USA

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