How does an ADJUSTABLE RATE MORTAGE work?
Adjustable rate mortgages allow the borrower to make lower initial payments in comparison to fixed rate mortgages. These payments increase over time to meet the market rate. An adjustable rate mortgage works well for younger buyers whose income will grow or self employed borrowers whose income can fluctuate. There is a large selection of adjustable loans tailored for specific needs. You will need to know the start rate, fully adjusted rate (which is the Index + Margin), and whether the loan has Negative or No-Negative amortization options. You will also need to know the Life cap of the loan. Consult your loan advisor or view the enclosed guide to adjustable rate mortgages.
