Adjustable Rate Mortgages - New Article

The adjustable rate mortgage has been in the news a lot lately. This is partly due to the high number of home foreclosures happening across the country right now. Some mortgage experts claim that adjustable rate mortgages (or ARMs) are playing a big role in the rate of foreclosures.

You see, the ARM loan entices many home buyers because of its low initial interest rate -- lower than a traditional fixed rate loan in most cases. But "initial" is the key word here, because the interest rate and mortgage payment will eventually adjust, hence the name adjustable rate mortgage.

When the interest rate adjusts, many homeowners are caught off guard by just how much it increases their monthly payment. They knew it would adjust -- they just didn't' expect the significance of that adjustment.

Some homeowners plan ahead and are able to refinance or sell the property prior to the loan's adjustment phase. Other homeowners don't plan so well, and when they can't afford the new payment, they often end up as another foreclosure statistic.

That's why we have started a campaign to educate home buyers about the pros and cons of the ARM loan. Our latest installment is a thorough review of the adjustable rate mortgage loan (what they are, how they work, the advantages vs. disadvantages, etc.). This is a pretty lengthy article, but we have made it "required reading" for anyone considering an ARM loan. We do our part!

Adjustable Rate Mortgages - Your Guide to the ARM

Happy home buying!

~Brandon