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5/1 ARM Offers Best of Price and Stability

December 22, 2010

With rising interest rates, this is a great time to take a fresh look at adjustable rate mortgages (ARMs) for your home purchase or refinance. These are not the exotic ARMs involved in the subprime meltdown – they are traditional, 5/1 ARMs with unbelievable rates that are in the threes today! That’s more than a point lower than 30-year fixed rates.

A 5/1 ARM combines the best features of adjustable and fixed rate products. It delivers a very low interest rate and therefore, a lower monthly payment typical of ARMs. But the five-year rate lock gives homeowners the stability and predictability of fixed payments that will not increase in the near future.

For the right borrower, a 5/1 ARM can be a prudent choice. Especially beneficial if you:

  • Plan to move in the next 5 years – the rate will never adjust if they sell the home in that time period.
  • Anticipate a salary increase– an ARM may allow these borrowers to enjoy lower monthly payments or a larger home while their pay is ramping up.

We offer both 5/1 conventional and FHA loans, and we service them in-house. Talk with one of our loan officers about how you can apply for this versatile mortgage today!

Happy Holidays to you and your family.  Thank you for your business and your continuing partnership.

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