Adjustable Rate Mortgage

A 30-year ARM (Adjustable-Rate Mortgage) loan also lasts for 30 years. However, after an initial fixed rate period, the rate adjusts based on the market. There are limits to the amount the rate can increase at one time as well as a limit to the total amount the rate can increase over the life of the loan. This helps prevent payment shock that might otherwise come from a sudden and large increase in the payment at one time.

No matter which mortgage option you choose, there are two things you can do to ensure you get the best possible terms. Take time to get pre-approved early; even if you think you are a year away from purchasing. This allows you to review your situation with a mortgage professional and get tips and advice on how to increase your credit score most efficiently, as well as, learn how putting down more or less money affects your loan terms and payments so you can determine your goals and set a plan.