An adjustable-rate mortgage (ARM) can offer a lower initial interest rate than a fixed-rate loan, but the right choice depends on more than the first monthly payment. Your financial position, expected time in the home, and ability to handle future payment changes all deserve a closer look.
On the Real Estate Update Podcast, host Paul Centopani talks with Shawn Yerkes, Group President of Financial Services at Genstone Companies, about when an ARM may make sense. The conversation explores potential benefits and risks, and how buyers can evaluate the decision alongside a fixed-rate mortgage.
Three considerations for homebuyers
- Your timeline: Consider how long you expect to own the home and when the loan’s initial rate period ends. Leave room for plans to change.
- Your future payment: Ask your lender how the index, margin, and rate caps work, and what your highest possible payment could be. Test that amount against your budget.
- Your exit strategy: Selling or refinancing may be part of your plan, but neither is guaranteed. Changes in home value, income, or credit could affect your options.
The CFPB’s ARM handbook is a useful resource to review with your lender before choosing a loan.
Ready to explore your homebuying goals? Connect with a Genstone Realty agent to discuss your home search, while your lender helps you compare financing options.
