Adjustable-Rate Mortgages

An Adjustable-Rate Mortgage (ARM) is a great financing solution with flexible term options through the life of your home loan. We have competitive rates and know your market like the back of our hand.

ARMs for Short-term Buyers

If you’ve bought a home for the short-term or if you’re looking for flexible term options on your loan, an Adjustable-Rate Mortgage (ARM) is a great financing solution. Choosing an Adjustable-Rate Mortgage means your interest rates reflect the current state of the market, meaning your housing payments will fluctuate throughout the life of the loan.

At Central Bank, we provide competitive rates and are very knowledgeable of the market. If an Adjustable-Rate Mortgage is right for you, speak with one of our knowledgeable lenders to help find the right mortgage term for your needs.

Benefits of an Adjustable-Rate Mortgage

Whether you’re a short-term buyer or want more flexibility in term options for your mortgage, there are many benefits to choosing an Adjustable-Rate Mortgage:

Lower Initial Interest

While interest on fixed rate mortgages are determined by the states of the market, interest rates on Adjustable-Rate Mortgages typically start under market rates and gradually increase over time. Lower interest rates also mean your payments will be lower as well. If you plan to only stay in your home for a year or two, an ARM can provide the best initial rates.

A Good Choice for Short-term Buyers

Short-term buyers can benefit greatly from an Adjusted-Rate Mortgage, especially if rates are low in the market. Lower rates mean buyers can take advantage of lower house payments and pay less interest over the short period of time they plan to stay in their home.

Your Interest Rate is Determined by Market Conditions

Having a mortgage where your payments are determined by the market can be a good or bad thing. If rates increase, so does your payment, but if rates decrease, your payment could as well. While many Adjusted-Rate Mortgages have a fixed period in which your payment stays the same, that period can vary based on the loan and your interest will inevitably increase the longer you hold the loan. Individuals and families considering an Adjusted-Rate loan should be prepared for unexpected payment increases and have cash reserves available.

No Penalties for Paying Extra Principal

Knowing you won’t be penalized for paying more to the principal of the loan means that you can take advantage of lower payment periods throughout the life of the loan and pay it down. Not only can this benefit short-term buyers, but also buyers who are interested in quickly paying off their loan while paying as little interest as possible.

Choose the Life of Your Loan

Adjusted-Rate Mortgages are typically 30 year loans, but you can decide how long your initial interest rate is fixed before it begins to adjust with the market. The most common loans available are 5-1, 7-1 or 10-1, meaning you can choose a fixed rate term of five, seven, or 10 years, with the remainder of the loan fluctuating annually dependent on market rates.

Get Prequalified for Your Adjusted-Rate Mortgage with Central Bank

No matter if you are a short-term homebuyer or a homebuyer looking to quickly pay off your mortgage without paying too much in interest an Adjusted-Rate Mortgage may be right for you. To find out if an ARM loan is right for you, visit your local Central Bank location to speak with one of our mortgage lenders. Ready to see if you qualify for a home loan? Start the process and get prequalified online today!