Peter Cook - Adjustable Rate Mortgages

Adjustable-Rate Mortgages

Good for purchase or refinance, with terms of 15 and 30 years.
Initial fixed interest rate for 1 year, 3 years, 5 years and 7 years.
Protection against unlimited interest rate increases.
Many of our ARMs are assumable.
Use your loan to buy a primary residence, invest in a second home or buy an income property.

You want lower initial monthly payments than a fixed-rate mortgage usually offers.
Lower initial monthly payments means you can buy more home.
You plan to own your own home for the initial fixed rate period.
You think interest rates may be headed down in the next few years.

Enjoy the security of interest rate protection with periodic and lifetime rate adjustment caps.

Rate adjustment caps limit how much your interest rate can go up or down.
After the initial fixed-rate period, rates can adjust up or down annually based on the movement of a specified index. The rate consists of an index plus a margin. The margin is determined at the time you lock in your interest rate.
The index used is based on the particular ARM loan and is a standard industry-recognized interest rate "benchmark".
Each year your loan margin is added to the index value to determine your new interest rate. Your monthly payment changes as the index changes.
On 1- and 3-year ARMs, the rate can go down or up a maximum of 2 percentage points annually at the end of the initial fixed-rate period.
On 5-and 7-year ARMs, the rate can go down or up a maximum of 5 percentage points at the first adjustment after the initial fixed-rate period, then down or up a maximum of 2 percentage points annually.
With all ARMs, you get a lifetime interest rate cap, which is determined at the time you lock in your interest rate. You know from the start what the maximum rate you would ever have to pay.