Learn About…
Fixed-Rate / Adjustable-Rate Mortgages (ARM)
Fixed-Rate VS Adjustable-Rate Mortgage
What does this mean? What is the difference? How do I decide?
Woah, woah, slow down! I know you’re curious now.
YES, you can choose between the two. We have made this article to help you break it down.
Fixed-Rate Mortgage
With a fixed-rate mortgage, your interest rate remains the same for the entire life of the loan. Unless you choose to refinance and enter a mortgage with a different rate.
Adjustable-Rate Mortgage
With an Adjustable-Rate Mortgage, commonly referred to as an ARM, rates and monthly payments remain the same for a set period, then change periodically. For example, a 5/1 ARM locks in your rate for the first 5 years, then your rate will fluctuate once per year. Your rate will either increase or decrease depending on rate trends in the U.S.
To help you best decide which is right for you. We broke down a Pros list below, Cons are depending on your situation, please ask your Loan Officer:
It is normal to have questions, especially about a loan product you may have never heard of! Give us a call and schedule a consultation today!
Pros of Fixed-Rate Mortgages
- If mortgage rates increase, you keep your lower rate. Because rates are relatively low right now, chances are, your rate will increase later if you choose an ARM. But with a fixed rate, you get to keep your low rate for the entire life of your loan.
- Predictable payments make it easier to budget. Granted, certain payments that are wrapped up in your mortgage could change over the years, such as private mortgage insurance or property taxes. But your interest rate will stay the same from year to year, which could make it easier for you to plan out your monthly expenses.
Pros of Adjustable-Rate Mortgages
- Short Term Savings. If you are not planning on owning the home more than a few years, a 3- or 5-year ARM may be the better choice. Ask your loan officer about this option!
Bill Craft
Sales Manager
NMLS 1621885
State Lic: AZ LO-0942496, CA-DBO01621885, MLO-54015VA
PHONE: (928) 366-1639
PHONE: (928) 247-9089
Ray Ochoa
Senior Loan Officer
Derek Egeberg
Branch Manager
Rosa Castillo
Senior Loan Officer
