Are you wanting to buy a home? What is an ARM Loan or Mortgage? What is the difference between 3-5-7-10 ARM LoansThe bank might have told you about adjustable-rate mortgages and how you should consider them because of the low-interest rate. An adjustable-rate mortgage (ARM) is a type of mortgage in which the interest rate on the outstanding balance varies throughout the loan's lifetime. Initially, the interest rate is fixed on an adjustable-rate mortgage (similar to a fixed-rate mortgage), but after a specific period, it fluctuates. This can be lucrative in the beginning as the initial interest rates are typically lower than fixed rates, but the interest rate can skyrocket later, depending on the market. There are usually caps on how much the interest rate and payments can rise per year over the loan's lifetime. An ARM can be a good choice for a home buyer looking to pay their home off in the time period of the loan that is a fixed rate.  ARM's track an index that determines the interest rate you'll pay. Adjustable-rate mortgages typically track the one-year Treasury bill or the Cost of Funds Index (COFI). In addition to the index rate, there is an additional margin added on top of that for your loan.  For example, if the index is tracking at 2.6% and your ARM margin is 2%, your interest rate would be 4.6%. ARMs can be beneficial in certain situations, but the wide range and adjustable-rate can hurt a home buyer if they're not prepared to pay it.  You also might be thinking that you can refinance at the end of the fixed rate. While this is possible, your mortgage will reset to the initial term (typically 30 years), and you'll have that five years of interest added on again. In this scenario, you'll likely end up paying much more than you would have with a fixed-rate mortgage.  Bottom line: ARM (Adjustable-Rate Mortgage) - Offers a lucrative interest rate for the fixed period but is unpredictable after that.  Fixed-rate mortgage - Offers a predictable payment and static interest rate over the lifetime of the loan.  This video is for educational purposes.  #homebuying #peronalfinance #fixedratemortgage #adjustableratemortgage  I am helping so many people relocate to the Salt Lake City, Utah area and I absolutely love it! I have worked with individuals and families from all over. If you're planning to move to Salt Lake, or even just invest or visit, make sure to get in touch with me!   Subscribe to the channel here:  https://www.youtube.com/channel/UCgIA...   Check out my podcast We Are Utah here:  https://podcasts.apple.com/us/podcast...   Look for properties in Utah on my website:  www.WasatchWheeler.com   Jordan Wheeler Call/text - 801-725-2274 [email protected] Follow me on Instagram: @wasatchwheeler

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