Adjustable rate mortgages offer much lower interest rates then a fixed rate mortgage and are a great way to buy a bigger house or save money on your monthly mortgage payments.
However not all adjustable rate mortgages are created equal and if you take the time to shop carefully for the right loan you will end up with a loan that will maximize the benefits these an ARM offers borrowers.
Tips For Getting The Best Adjustable Rate Mortgage Get The Lowest Margin- Nothing will affect your adjustable rate mortgage more then the margin.
The margin is added to the loans index to determine your interest rate once the fixed rate period expires.
Bottom line shop for the lowest margin that you can, even if you plan on refinancing before the rate adjusts because life's plans can and do change and the last thing you want is a loan with a higher then needed adjusted interest rate.
Get The lowest Closing Costs- When shopping for and adjustable rate mortgage you should look for the lowest closing costs.
Many people take out adjustable rate home loans to take advantage of the lower rates and payments, it makes no sense to lose these money saving benefits to excessive closing costs.
Closing costs can vary a lot between lenders so take your time when shopping for low closing costs.
Get The Longest Fixed Rate Period You Can- The major drawback to adjustable rate home loans is that the fixed rate is often for a short amount of time.
However is you shop around you may be able to find a great deal on a seven year adjustable rate home loan.
A longer fixed rate period will give you a longer time to benefit from the monthly savings an ARM loan offers and also let you enjoy the stability of a fixed rate.