Which ARM Home Loan is Best For You?

There are three types of ARM home loans. Your situation dictates which arm home loan is best for you.

Types of ARM Home Loans

If you are planning on moving relatively soon, consider a hybrid ARM home loan. Hybrid ARM loans provide low, fixed interest rates over a period of time and then switch to adjustable interest rates. If you move before the fixed rate period expires then you pay the very low monthly rate, pay off the loan, and avoid the higher interest rate.

If you expect an income increase in the future, consider choosing an interest only ARM home loan. You will pay only the interest rate on your loan each month for years. At the end of a period of time, hopefully when your expectations have been confirmed, you will begin to pay off the actual mortgage. This option is also attractive to someone who needs buying power in the near future but will be able to eventually afford a tighter budget.

If you are unsure of where you will be financially each month, you can ensure payment flexibility by choosing the payment-option ARM home loan. This choice will allow you to decide whether to pay the interest rate and a portion of the principal, just the interest rate, or a minimum payment each month. You pick the payment based on your monthly situation.