ARM AS AN ALTERNATIVE

When it comes time to buy a home, there are so many different financing options to consider. The two most notable are fixed-rate and adjustable-rate mortgages.

With a fixed-rate loan, the interest rate is set for the life of the loan. The monthly mortgage payments are always the same. This loan is good if you don't want your payments to fluctuate from year to year or if you see your income falling as your mortgage payments, could possibly increase. If, however, you want an alternative, you can choose an adjustable rate mortgage (ARM). With an ARM, the interest rate of the loan changes according to the market and monthly payments can change, as well.

One advantage of an ARM is that your initial interest rate will be lower than were you to go with a fixed loan. Also, most ARMs have interest caps on them preventing the loan's interest rate from rising too high over the life of the loan or even at the adjustment periods. If you are subject to corporate transfers, an ARM may be for you because you may be in the home less than three years. In this case, you would sell your home before the interest rates on the loan had a chance to rise too much.

I'll be glad to answer any questions you hay have concerning ARM's. As your local real estate professional, I can help; just call.

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