SIX MONTH ADJUSTABLE RATE MORTGAGE
This adjustable-rate mortgage (ARM) offers a low initial interest
rate for the first six months with an interest rate that adjusts
every six months thereafter. The rate caps per adjustment can
be 1 percent or 2 percent; the lifetime adjustment caps can
be 4 percent, 5 percent, or 6 percent. This type of mortgage
may be right for you if you anticipate a rapid increase in
income over the first few years of your mortgage. It lets you
maximize your purchasing power immediately. It may also be
the right mortgage for you if you plan to live in your home
for only a few years.
The interest rate is tied to a published financial index.
When comparing ARMs that have different indexes, look at
how the index has performed recently. Your Fannie Mae-approved
lender can provide information on how to track a specific
index and how to review a 15-year history of the index.
Advantages:
- Maximizes your buying power immediately, especially if
you expect your income to rise quickly in the next few
years.
- Lets you select an index that meets your financial
needs.
- Easier to qualify for due to a low interest rate
and a 1 or 2 percent annual rate cap.
Some six-month ARMs let you convert to a fixed-rate loan
at certain adjustment intervals - ask your Fannie Mae-approved
lender which of their six-month ARMs include this option.
Your lender can also provide further specifics about this
mortgage option.
Additional Details:
You can get a six-month ARM with a term of 10 to 30 years.
Typically, and commonly, they
are 30 years.
These loans can be used to buy one- to four-family, owner-occupied
principal residences including second homes, investment properties,
and condos, co-ops and planned unit developments. Manufactured
homes are also eligible. (Manufactured housing units must
be built on a permanent chassis at a factory and then transported
to a permanent site and attached to a foundation.)
©2003 LenderDave.com Information
sources include: 2003 data from Fannie Mae. All rights reserved.
GETTING STARTED
If you would like to begin the application process for
this loan, complete our online application
or learn
more about our current rates with today's
rate sheet.
If you have questions or would like to speak with me, please
give
me a call at 888.691.0151 or drop me an
email at dave@lenderdave.com.
