Adjustable Rate Mortgages (ARMs)
Variable or adjustable loan is loan whose interest rate, and accordingly monthly payments,
fluctuate over the period of the loan. With this type of mortgage, periodic adjustments based on
changes in a defined index are made to the interest rate. The index for your particular loan is established
at the time of application. When your rate adjusts, your new interest rate = index + margin.
The margin is fixed percentage points added to the index to compute the interest rate.
The result will then be rounded to the nearest
one-eighth of a percent.
The margins remain fixed for the term of the loan and are not impacted by the financial markets and movement of interest rates.
Lenders use a variety of margins depending upon the loan program and adjustment periods.
Most ARMs have an interest rate caps to protect you from enormous increases in monthly payments.
A lifetime cap limits the interest rate increase over the life of the loan. A periodic or adjustment
cap limits how much your interest rate can rise at one time.
Jumbo Fixed Rate Mortgages |
Jumbo Adjustable Rate Mortgages (ARMs) |
Jumbo Interest Only Mortgages
Jumbo Option ARMs |
Jumbo B/C Lending (Alternative Lending) |
Jumbo Construction Loans
