Everything you need to know about home loans in one place. Use our "frequently asked questions" section to learn everything about mortgages, refinancing, home equity lines of credit and more.
The 1-Year ARM, though rare, is yet another hybrid adjustable rate mortgage option available to borrowers. As the name suggests, a 1-Year ARM has an initial period of one year with a fixed interest rate. After the initial year, the fixed interest rate converts into an adjustable interest rate, that can be adjusted or “reset” on a yearly basis (annually).
Read MoreWhen you get an adjustable rate mortgage, the interest rate changes at set intervals in accordance with the market. In order to keep the rate from rising too high too fast, interest rate caps were introduced, to ensure the rate could only change at a manageable pace.
Read MoreA floating interest rate is also known as an adjustable or variable interest rate. The name comes from the fluidity of the interest rate that borrowers must contend with, as the interest percentage fluctuates throughout the life of the loan (for hybrid ARMs, the rate fluctuates after the introductory period ends). The interest rate is affected by the market’s margins or mortgage index.
Read MoreA hybrid ARM is a mortgage that combines elements of a traditional fixed-rate mortgage and an adjustable-rate mortgage. To do this, a hybrid ARM has two parts, or stages: during the first part of the loan, the interest rate is fixed, meaning it doesn’t change. During the second part, the rate will change based on a specific market index.
Read MoreA 3/1 ARM is an adjustable-rate mortgage in which the rate is fixed for the first three years of the loan. As a hybrid mortgage, it has elements of both a traditional fixed-rate mortgage and an adjustable (or variable) rate loan. As with pretty much all hybrid rate mortgages, the shorter the period of the fixed-rate part of the loan, the lower the initial interest rate. That’s the bank’s way of compensating you for the increased risk you’re taking on when the adjustable part of the mortgage kicks in.
Read MoreA 5/6 ARM is a kind of hybrid adjustable-rate mortgage in which the fixed interest rate period of the mortgage lasts for 5 years. After the fixed-rate period is over, the variable-interest rate part of the mortgage begins.
Read MoreA 3/6 ARM is a type of hybrid adjustable rate mortgage in which the initial, fixed rate portion of the loan lasts 3 years, after which the adjustable-rate part of the mortgage begins.
Read MoreThere are many different mortgage options for homebuyers to choose from. For starters, mortgages are usually categorized as either a fixed rate or adjustable rate. Then there are various loan programs to choose from including FHA Loans, VA Loans, USDA Loans, or Conventional Loans
Read MoreBuying your first home is a challenging but important first step in securing your future. There are many financial products available on the market for first-time homebuyers. Each product has its target market, so it’s important to understand your needs so as to match them to the products on offer.
Read MoreThe FHA 7 year ARM is a hybrid mortgage that is guaranteed by the Federal Housing Authority. It is deemed a “hybrid” mortgage because it has a fixed interest rate in the beginning for 7 years and then switches to a variable interest rate. As with all adjustable rate mortgages (ARMS) the rate is composed of an index rate and the lender's margins.
Read MoreThe 7/1 ARM is a hybrid mortgage, it comprises years with a fixed interest rate followed by years with a variable rate. The “7” is the number of years with a fixed interest rate, the “1” represents the annual adjustment period.
Read MoreAn adjustable-rate mortgage (ARM), also known as a variable-rate mortgage or tracker mortgage, is a loan with an interest rate that can go either up or down depending on market conditions. These market conditions are based on an underlying index like the federal funds rate, treasury bills, or LIBOR.
Read MoreA 5-year ARM FHA mortgage is a loan with a fixed and variable interest rate that is guaranteed by the Federal Housing Authority (FHA). The loan is a hybrid adjustable-rate mortgage (ARM): it starts out with a fixed interest rate for the first five years, then the rate becomes variable. The loan comes with a guarantee to the lender that the FHA will pay it off if the borrower fails to pay.
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