ARMs - Adjustable Rate Mortgages

If you are a first time home buyer one of the easiest ways to make your dream come true is with an adjustable rate mortgage. It is true that they do not offer the security over time of a fixed loan, however their rates are always better initially... and sometimes that is all you need! In the first 5 years of an adjustable rate loan it is possible to save tens of thousands of dollars over a comparable fixed rate loan. ARMs do offer many unique variations such as 3/1’s, which mean the loan is fixed for the first 3 years then it adjusts every year after that. The fixed period can also be for 5 or 7 years with the 5/1 or 7/1. After the fixed period is up on this type of loan it is very common to refinance into a fixed rate loan.