What is an ARM and can it be better than a FRM?

An ARM is an adjustable rate mortgage. The advantage are that you can lock into a lower interest rate for a fixed period of time, usually 3, 5, 7,10 years, at at which time the rate would adjust to the current market. The issues that might arise later are if the home value declines, you might have a problem refinancing, OR if rates are higher when it comes time to lock into a rate, the payment may be too high to handle. If you watch the rates closely, the second one should not cause any issues.Please feel free to call me to discuss in more detail. Christina Murphy, Oglethorpe Mortgage, 678.493.3366.

You will need to ask what is the rate and closing costs that you are being offered and then you can shop this will give you an idea of where your at. With rates as low as they are now you need to compare the FRM to the ARM and see if it is really worth the risk.

An adjustable rate mortgage is one that adjusts on a monthly, semi annually, or anual basis. Many adjustable rates loans in the past would adjust right after you got them, such as once a month, or once a year. Today the most popular adjustable rate products come with an initial fixed rate for a certian period such as 5 years or 7 years. The 3 yr fixed is also available, but it is not even as good of a rate as the 5 yr, so no one takes that. And, there is a 10 yr fixed Arm, but those rates are often the same or worse than a 30 yr fixed. Guys on adjustable rates right now are loving the low rate they currently owe to their lender as rates are at all time lows. Lenders take a financial index such as the 1 year libor (today about .9%) add a margin to it such as 2.5% to get a rate of 3.4%! One question every loan officer needs to ask is how long you plan to stay in, ore own the home. If you only plan to own the home for 5 years or less, a 5/1 arm at a lower rate fixed for the first 5 yrs is a great deal with rates in the 3% range. Good Luck Jeddnabonsal@gmail.com 310 433 1703 Pinnacle Bancorp Los Angelescalculate the rate you you will owe. Meanwhile

In your situation I suggest that you get a 30-year fixed rate. Rates are risk-based. Anyone that quotes you a rate without knowing your credit profile and a close approximate value on your property is doing you an injustice.Happy funding, Rudi