Thinking of buying a home in 2024? One popular option is the Adjustable-Rate Mortgage, or ARM for short. It’s like the chameleon of home loans–adapting to changing interest rates. But, like any financial decision, ARMs come with their own set of pros and cons. Read on to see why an Adjustable-Rate Mortgage (ARM) might be right for you!
ARMs Provide Financial Flexibility
One of the most challenging aspects of buying a home, especially in a high-cost market, is figuring out how to afford your monthly payments. ARMs can offer you a bit of breathing room with lower introductory rates during the initial fixed-rate period. This period can last anywhere from one to ten years, during which the interest rate for an ARM is usually lower than the average rate for a fixed-rate mortgage. With those lower initial monthly payments, ARMs offer you the freedom to make your dream of home ownership a reality and allocate your hard-earned income where it’s needed most. Got high-interest debts? Need to save for education, retirement, or a new business? ARMs can help you tackle all your real estate and financial goals.
ARMs Offer the Ability to Refinance in the Future
ARMs have earned a bit of an unfair reputation. The last housing market downturn saw some people with ARMs struggling to make their monthly payments when rates adjusted up. However, like anything in your toolkit, ARMs can be a great strategic choice when used correctly. One key feature to be aware of is the ability to refinance. Refinancing an ARM can be a game-changing strategic play when you’re ready to lock in a fixed rate or tweak the terms of your loan. It allows you to seize the opportunity and potentially score a more favorable deal when rates inch downward. However, it requires you to stay up on market trends, talk to your lender, and if rates don’t go down before your introductory period is over, be prepared to handle that new monthly payment.
ARMs Are a Great Choice for Short-Term Homeownership
Tired of renting and paying someone else’s mortgage, but not sure how long you’re going to stay in a particular property or area? An ARM can be an awesome choice for short-term homeownership! If you’re planning to sell or relocate before your ARM starts adjusting, you’ve got the upper hand. ARMs become your accomplice in this short-term adventure, offering you a cost-effective mortgage solution without the long-term commitment. It’s like having a mortgage plan tailored to your specific timeline, allowing you to make homeownership a reality without feeling completely stuck and tied down.
Ready to talk about your loan options and see what you could potentially qualify to buy in your area? Click here to contact us at the Potempa Team and take the next steps to get pre-qualified!
