Every family deserves to have a home they love. Some people dream of living on the waterfront, while others love the idea of a peaceful country house with a garden.
At American United Federal Credit Union in Utah, we offer a variety of financing types to help you buy an incredible home. One excellent option is an adjustable-rate mortgage.
What Is an Adjustable Rate Mortgage?
Adjustable-rate mortgages are a type of home loan. They have a fixed component, locking in initial interest rates for a specified time. We offer 3-year and 5-year ARMs. After that, the loan’s interest rate is recalculated on an annual basis. ARMs are popular because they combine the flexibility of variable interest with lower payments for the initial period of fixed interest.
What Are the Advantages of Adjustable Rate Mortgages?
With traditional variable mortgages, interest rates are always in flux, and monthly payments can change a lot. Fixed rate mortgages solve that problem by locking in stable payments during the entire loan. However, this can make you miss out on lower interest rates that may become available.
- Lower initial payments: The interest rate on ARMs usually starts at a lower rate than fixed rate loans. This is a big help when making payments, although it’s good to plan for possible increases.
- Market flexibility: If the market interest rate drops, you can take advantage of it without having to worry about refinancing costs.
- Larger loan options: Thanks to a lower initial interest rate, you can often qualify for a larger loan. That gives you more options for finding your ideal home.
- Buyer-friendly protections: Unlike true variable loans, ARMs offer caps and ceilings to protect you from interest rate increases that are too steep.
For many homebuyers, an adjustable rate mortgage provides the best of both worlds. ARMs are especially useful for people interested in fixing up a home and reselling quickly.
Why Choose Us?
At American United Federal Credit Union, we know everything about home financing. We can help you make a great choice that fits your lifestyle and budget while also allowing you to buy an amazing home.
After all, we’ve been serving our members since 1952, and we’re a non-profit organization. That means we care about making you happy above all else.
Our friendly financial advisers really help. They can answer your questions, explain anything you don’t understand and offer professional recommendations that work. Apply for an adjustable rate mortgage right away and buy the perfect home for your family.
Image Credit: Shutterstock/Teguh Jati Prasetyo