An Adjustable-Rate Mortgage (ARM) is a type of home loan where the interest rate is not fixed but adjusts periodically based on market conditions. Unlike a fixed-rate mortgage, an ARM offers a lower initial interest rate, which can result in significant savings in the early years of the loan.
An Adjustable-Rate Mortgage (ARM) is a home loan with an interest rate that changes periodically after an initial fixed-rate period. ARMs often start with lower rates compared to fixed-rate mortgages, making them an attractive option for buyers seeking affordability during the early years of homeownership.
Disclaimer: Advertised rates and fees depend on borrower qualifications and market fluctuations.
ARMs are structured with two phases:
Fixed-Rate Period:
Adjustment Period:
Example: A 5/1 ARM has a fixed rate for the first 5 years, then adjusts annually.
At Simply Approved Mortgages, we operate with a 1.5% fee, significantly below the industry standard. This ensures more savings for borrowers without compromising service quality.
Disclaimer: Simply Approved Mortgages complies with all state and federal licensing requirements that we are licensed in.
Lower Initial Rates:
Increased Buying Power:
Flexibility for Short-Term Ownership:
Potential Savings:
Credit Score:
Debt-to-Income Ratio (DTI):
Down Payment:
Income Verification:
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An ARM may be a good fit if:
5/1 ARM:
7/1 ARM:
10/1 ARM:
Each option provides varying levels of stability and flexibility, allowing you to choose the right fit for your needs.
At Simply Approved Mortgages, we offer a wide range of mortgage products tailored to meet your needs:
👉 Explore these options today and find the perfect mortgage solution for your needs!
With our industry-leading 1.5% fee, compared to the standard 2.75%, we save you thousands while offering competitive rates tailored to your needs. Learn More.
Our team of seasoned professionals is dedicated to simplifying the mortgage process, providing personalized solutions, and ensuring you feel confident every step of the way.
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Enjoy lower monthly payments in the early years of your loan.
If market rates fall, your payments may decrease.
Lower initial rates can make it easier to afford a more expensive home.
An ARM has an interest rate that can change over time, while a fixed-rate mortgage has an interest rate that remains the same throughout the life of the loan.
The frequency of rate changes depends on the terms of your ARM. Common adjustment periods include annually, semi-annually, or even monthly.
Yes, the primary risk is that your interest rate could increase significantly after the initial period, leading to higher monthly payments.
Your rate is based on an index (e.g., LIBOR, SOFR) plus a margin set by the lender.
Yes, ARMs have caps on rate increases, including:
Yes, refinancing is a common strategy to lock in a stable rate before the adjustable period begins.
If your down payment is less than 20%, private mortgage insurance (PMI) may be required.
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Small changes in your credit score can lead to significant savings on your mortgage.
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Remember that a good credit score can lower your interest rate on your mortgage.
In today’s fluctuating economy, Canadian homeowners are increasingly looking at refinancing their mortgages
In today’s fluctuating economy, Canadian homeowners are increasingly looking at refinancing their mortgages
In today’s fluctuating economy, Canadian homeowners are increasingly looking at refinancing their mortgages
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