Adjustable Rate Refinance Mortgages (ARMs)

An ARM can save you money on your loan, but there is a risk that market rates may increase during an adjustment period and make your monthly payments higher. However, you can set caps on your ARM. A periodic cap limits how much your rate can adjust at specified adjustment dates. A lifetime cap limits how much your rate can increase over the life of your loan. A payment cap limits how much your monthly payment can increase with each adjustment.


You must have sufficient income and credit history to qualify for an adjustable rate mortgage.

Pros And Cons

How long you plan to live in the home is important. For example, if you’re planning to live in your home for seven years, an adjustable rate mortgage may be more favorable.

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