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There are two basic
mortgage types: Fixed Rate and Adjustable Rate
or ARM.
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| Fixed Rate: |
The rate is set and
fixed at closing. And it remains fixed at that rate for the
length of the mortgage, usually 15 or 30 years.
|
| Adjustable Rate
Mortgage (ARM): |
There are several
rate scenarios regarding ARM's. The basic principal is that the rate
is pegged to a particular published base rate such as the Prime Rate,
U.S. Treasury Rate, Libor Rates, etc. These rates move up and
down based on the economy and Federal Reserve Policy. As a
result, your mortgage rate moves up or down in accordance with
the basic rate. The advantage to an ARM is that starting ARM rates
are generally lower than fixed rates which allows you to qualify
with less income. It also allows you to start with lower
payments that can increase along with your income.
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| Starting
Rates |
Mortgage
Terms |
Rate |
| 5 |
30 years |
Fixed |
| 4 |
15 years |
Fixed |
| 3 |
3/27 |
3 years fixed,
27 years ARM |
| 2 |
2/28 |
2 years fixed,
28 years ARM |
| 1 |
6 months Libor |
Adjust every 6
months for term |
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| 1=Lowest 5=
Highest |
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| For immediate
assistance, please call us toll free at 1866-364-5550 |
