Adjustable Rate Mortgages
We understand the importance of choosing the right type of mortgage to fit your unique needs and financial goals. When comparing adjustable rate mortgages (ARMs) to fixed rate mortgages (FRMs), there are several advantages that an ARM can offer.
What is an Adjustable Rate Mortgage?
An Adjustable Rate Mortgage (ARM) is a mortgage loan in which the interest rate is periodically adjusted based on an index reflecting the cost of funds to the lender. The adjustments are made at set intervals, typically annually, and the rate can go up or down. ARMs offer a lower initial interest rate than fixed-rate mortgages, making them an attractive option for borrowers looking for a more affordable monthly payment. However, it's important to keep in mind that the interest rate on an ARM can change over time, potentially leading to higher monthly payments. As a responsible financial institution, we highly recommend that potential borrowers carefully consider their financial situation and the potential risks before deciding on an ARM.
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Four Key Benefits of an Adjustable Rate Mortgage
We at CNB Bank & Trust, N.A. are dedicated to providing our customers with the resources and information they need to make informed financial decisions. If you are considering an adjustable rate mortgage, we encourage you to speak with one of our knowledgeable loan officers to determine if it may be the right choice for you.
Lower Initial Interest Rates
ARMs typically have lower initial interest rates than FRMs, making them an attractive option for borrowers who are looking to save money in the short term.
Increased Flexibility
With an ARM, the interest rate can be adjusted based on changes in market conditions, giving borrowers the ability to adapt to changes in their financial situation.
Reduced Risk
ARMs are typically less risky than FRMs because they are not tied to a single interest rate for the life of the loan. This allows borrowers to take advantage of lower rates if market conditions improve.
More Affordability
By having the option to adjust their interest rate, borrowers may be able to keep their monthly payments lower, making homeownership more affordable over the long term.
Ready to Apply?
Our prequalification form makes purchasing a house easier than ever before. You can completed our prequalification application in a matter of minutes, and it's completely free. This is the first step to realizing your dream of home ownership, with no delay or hassle.
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Connect with Our Loan Officers
Ready to begin the mortgage process but not ready to apply? Our loan officers are here to help! With our expert guidance and personalized loan options, you can achieve your financial goals and enjoy peace of mind. Don't wait, reach out to us today and see the difference a supportive loan officer can make!
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