Purchase · Refinance
Adjustable-Rate Mortgage (ARM) Loans
An adjustable-rate mortgage starts with a rate that's fixed for an initial period, then adjusts on a set schedule based on a market index.
Your secure application is with Cornerstone First Mortgage, LLC (NMLS #173855). Starting an application is not a loan approval or a commitment to lend.
How Daniel explains it
Daniel's rule with ARMs is simple: understand the second half of the loan before you fall in love with the first half.
An ARM can make sense when you have a clear plan, like a likely move or a known change in income. He'll show you what the payment could look like after the first adjustment, using the loan's caps, so you're choosing it with your eyes open.
How an adjustable-rate mortgage (ARM) works
- The rate is fixed for an initial period, then adjusts at set intervals.
- Each new rate is based on a published index plus a set margin.
- Caps limit how much the rate can change at each adjustment and over the life of the loan.
- Your payment can go up or down when the rate adjusts.
When an adjustable-rate mortgage (ARM) may fit
- You expect to sell or refinance before or soon after the initial fixed period ends.
- You want a starting payment that may be lower than a comparable fixed-rate loan, and you understand it can rise later.
- You're comfortable taking on some interest rate risk.
What to know about an adjustable-rate mortgage (ARM)
- After the initial period, your rate and payment can increase.
- Refinancing later is not guaranteed. It depends on your eligibility and market conditions at that time.
- Ask to see the index, the margin, the adjustment caps, and the highest payment the loan's terms allow.
Straight answers
Adjustable-Rate Mortgage questions, answered
How much can an ARM payment go up?
It depends on the loan's caps, which limit how much the rate can change at each adjustment and over the life of the loan. Daniel will show you the caps on your specific loan and what the payment could be at each step.
Is an ARM riskier than a fixed-rate loan?
It carries more interest rate risk, because the rate can rise after the initial period. Whether that risk fits you depends on how long you plan to keep the loan and how much room your budget has.
Adjustable-rate mortgage rates and payments may increase after the initial fixed period. Eligibility depends on borrower, property, and program requirements. Interest rates, products, and loan terms are subject to change without notice.
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Your mortgage starts here.
Ready to take the next step? Start your secure application. Not sure which program fits? Contact Daniel's team and he'll walk through your options in plain English.
Your secure application is with Cornerstone First Mortgage, LLC (NMLS #173855). Starting an application is not a loan approval or a commitment to lend.