A more risky reason would be if you are sure you can invest the money saved by doing this for a secure profit at the end of your interest only period. How often it changes depends on the terms of the loan. Of course these changes are tied to the index that your ARM is based on. At the end of one year your mortgage company can increase your rate by two points, to 6%.00. Escrow amounts may vary from time according to the cost of these items. Therefore, you will be paying off the $100,000.
If you have a yearly cap of 2 points, and a life long cap of 6 points, this is what can happen to the percentage rate of your loan. We also offer Quality Web Hosting Services.Genesis Font is an SEO and Developer for Mortgage and Loan Officer Websites. For example- your mortgage starts at a rate of 4%.Balloon Mortgages* These types of mortgages allow you to carry a lower interest rate than most other types of mortgages. Here are the most common options. At the end of this time period a payoff payment, or balloon payment, is required to pay off the remainder of the loan. Another one would be if you are expecting a lump sum payment of money in the forseeable future.Fixed Rate Mortgages (FRM’s)* Interest rates stay constant for the life of the loan. This happens according to the terms of the loan you choose.* A convertible ARM allows you to have the lower interest rates for the beginning of the loan, but the option to convert to a fixed rate loan when you choose. The P & I portion would not change for the life of the loan.
There are many mortgage products available on the market today.* If your loan requires that you carry Personal Mortgage Insurance (PMI), these payments would be added to your monthly payment amount until this mortgage would no longer be necessary. It only delays you paying your principal for a preset length of time. This is usually between 1 and 5 years in length.* Payments are made up of principal and interest (P & I) portions and escrow portions. Escrow amounts would pay for things like home owners insurance and property taxes. The most common ones are if you do not make a set amount of money every month, such as being paid on commission or bonuses. The most common adjustment term is once every year. We can help you find out which one is right for you.* Offered in 10, 15, 20, or 30 year terms.