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How to choose an ARM or FRM!

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  • How to choose an ARM or FRM!

    We need to be more careful while choosing a variable-rate mortgage.

    Different types of ARMs exist. They are:

    Interest-only adjustable-rate mortgage: An adjustable-rate mortgage (ARM) with an initial interest-only payment period. After the interest-only period, the mortgage must amortize so that the mortgage will be paid off by the end of its original term. This means that monthly payments must increase substantially after the initial interest-only period lapses.

    Option adjustable-rate mortgage: Allows a borrower to pay off their loan balance using four payment options, including the following: 15-year term payment (Principal and interest)

    Hybrid adjustable-rate mortgage: A hybrid adjustable-rate mortgage, or hybrid ARM (also known as "fixed-period ARMs"), blends the characteristics of a fixed-rate mortgage and a regular adjustable-rate mortgage. This type of mortgage will have an initial fixed interest rate period followed by an adjustable rate period.

    If you need a variable rate mortgage, go through all the available options and if none of the options could satisfy your needs, it is better to choose a fixed rate mortgage rather than adjusting with any of the available schemes of a variable mortgage."
    A fixed mortgage rate is a rate attached to your mortgage throughout the entirety of the mortgage term. Contact us to secure a mortgage at the best rates.
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