STRETCH YOUR BUYING POWER WITH AN ARM

IS THE HOME YOU WANT OUT OF REACH?

In a time of rising rates and prices, the home you really want may be out of reach with the typical fixed-rate loan.

But stretching further isn’t really much of a stretch at all with an ARM—an adjustable rate mortgage. If you’re skeptical, be assured they’ve changed for the better over the years.

Here’s how they work:

• Most ARMs are hybrid. They are fixed for a period of time, usually 5, 7 or 10 years, before being subject to adjustments.
• During the initial period, rates (and monthly payments) will typically be lower than those offered by fixed-rate loans.
• Interest rate caps can keep future adjustments predictable.

For example, a 30-year loan of $300,000 could have a payment savings of over $183 per month with an interest rate that’s 1% lower. A loan such as a 5/1 ARM may offer this kind of payment savings.

ARMs aren’t for everyone, but hybrid ARM loans can offer years of fixed principal and interest payments. They work especially well if you plan to sell or refinance before the adjustments occur.