ARM Mortgage Rates Michigan

ARM mortgage rates in Michigan can fluctuate, and that could have an affect on what type of loan you might want to pursue. Instead of trying to figure out what kind of loan will be right for you, why not just get in touch with Gem Home Loans instead? We have the experience and know-how to show you what kind of loan will be the best choice, and do so in language that’s easy to understand. Working with us might just wind up being one of the best decisions you’ll ever make.

How an ARM Works

An adjustable-rate mortgage (ARM) is a home loan that has an interest rate that changes from time to time. As a result, your monthly mortgage payment can change as well. Interest rates with an ARM are usually lower than fixed-rate mortgages. Then, after a period of time, the rate moves according to the movement of whatever index the ARM follows.

When you get an ARM, you’ll have a fixed interest rate for a few years. The most common type of ARM is known as a “5/1.” All this means is that the fixed rate will last for five years. After that, the rate can change one time a year. There are also 3/1, 7/1 and 10/1 ARM programs.

There are a lot of different indexes, which are basically interest rates that are published by neutral parties. The paperwork associated with your loan will spell out the index that your specific ARM will follow.

The Benefits of an ARM

Regardless of the kind of mortgage you get, there will be some pros and cons. Here are the benefits of getting an ARM.

• You don’t have to refinance in order to benefit when interest rates fall. Your ARM will simply fall as well, and you’ll pay a lower amount each month as a result. You won’t have to deal with the fees and closing costs that are typically part of refinancing a home.

• Early in the term of the loan, your payments and rates will be lower. Lenders will typically only look at the beginning payment when deciding whether or not a borrower will qualify. This means you might be able to purchase a home that’s more expensive than would otherwise be possible.

• ARMs also help people save more money. When rates are low, you can take the money you’d normally put toward your mortgage in a savings or investment account.

The Drawbacks of an ARM

Here are some of the reasons why an ARM isn’t for everyone.

• When rates rise, they can rise dramatically. This can be a major shock, and really wreak havoc on your monthly budget.

• There can be some surprises that occur when the fixed-rate part of your loan ends. Having to suddenly make a larger monthly payment is more than some people are able to handle.

• ARMs can get very complex. If you don’t work with Gem Home Loans, you might wind up getting confused and locking yourself into a loan that you don’t completely understand.

Experience the Gem Home Loans Difference

When you work with Gem Home Loans, we’ll make sure you have the information you need regarding ARM mortgage rates in Michigan. You’ll be completely comfortable with your final decision. Call (248) 780-1030 or use our online form to learn more.