Adjustable Rate Mortgages

Adjustable rate mortgages and fixed rate mortgages differ significantly. With a fixed rate mortgage, the interest rate is constant for the life of the loan. With an adjustable rate mortgage, your interest rate is fixed for the first three, five, or seven years. After the initial fixed-rate period, the interest rate adjusts at fixed intervals (usually based on an index). Payments are adjusted either up or down.

Choosing a mortgage isn't as simple as it used to be, so let NextHome Mortgage help you through the process. Whether you're comparing two adjustable rate mortgages with each other or an adjustable rate mortgage with a fixed rate mortgage, we can talk with you about indexes, margins, discounts, caps on rates and payments, and negative amortization. Together, we'll consider the maximum amount your monthly payment could increase and analyze what might happen to your monthly mortgage payment in relation to your future ability to afford higher payments.

Generally, initial interest rates are lower for adjustable rate mortgages than for fixed rate mortgages--making the adjustable rate mortgage easier on your pocketbook than a fixed-rate mortgage for the same loan amount. Your adjustable rate mortgage could be less expensive over a long period than a fixed-rate mortgage IF interest rates remain steady or move lower.

If you're looking at more of a home than you qualify for now at a fixed rate, are confident your income will increase and/or plan on moving within seven years of buying your home, a NextHome Mortgage Adjustable Rate Mortgage may be the right option for you.

Other types of loans available: Bi-Weekly Mortgage Loans, FHA Loans, Interest Only Mortgages, and Fixed Rate Mortgages.