Adjustable-Rate Mortgage Refinance

How an Adjustable-Rate Mortgage Refinance Works

An adjustable-rate mortgage (ARM) refinance is an ideal option for homeowners who want a short-term option with a low initial interest rate. It’s most beneficial for people who expect to have an increase in income or more stable finances in the future when interest rates begin to adjust higher.

Here’s what you can expect with an ARM:

  • Lower starting interest rate
  • Lower starting monthly payment
  • Ability to afford more house space
  • Possible to pay less in return, in favorable market conditions

ARM loans (X/Y) have a fixed interest rate for the first X number of years, after which the rate can change once every six months or year (Y), depending on the program, for the remaining life of the loan. When the rate changes, your monthly payments will increase if rates go up and decrease if rates fall.

Adjustable rate mortgages offer flexibility and might be the right choice for you if you plan to move within five years. Contact a PrimeLending loan officer to see if an ARM is the right refinance choice for you.