Adjustable Rate Mortgage (ARM)

Adjustable Rate mortgage (ARM) also called as variable-rate mortgage is a mortgage loan where payments will fluctuate over time. The initial interest rate will be lower than that of a fixed rate mortgage; however, changes in the market could result in increased interest rates, which will ultimately effect the monthly payments.

For borrowers whose income may go up, an adjustable rate mortgage might be the best options because of early lower payments. Some loans are fixed for a certain period of time, and then they turn into adjustable-rate loans. For example, a 3/1 ARM loan offers a fixed-rate for the first three years, adjusting once a year thereafter. A 5/1 ARM loan offers a fixed-rate for the first five years, adjusting yearly thereafter.

In ARM, the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets. Among the most common indexes are:

  • The 11th District Cost of Funds Index
  • The Treasury Bill Index
  • London Interbank Offered Rate (LIBOR) based indexes
  • Constant Maturity Treasury (CMT)

For the borrower, adjustable rate mortgages may be less expensive, but at the price of bearing higher risk. Many ARMs have "teaser periods", which are relatively short initial fixed-rate periods (typically one month to one year) when the ARM bears an interest rate that is substantially below the "fully indexed" rate. The teaser period may induce some borrowers to view an ARM as more of a bargain than it really represents. A low teaser rate predisposes an ARM to sustain above-average payment increases.

Ask our Loan Originator about these and other special kinds of mortgages that fit your specific financial situation.

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Why Henry Munoz For Your Real Estate Financing, Listing Or Purchase Transactions

 Henry Munoz is a California Department of Real Estate licensed Real Estate Broker and Loan Officer.He has exceptional reputation as a Hard Money / Soft Money Private Money Lender in Torrance,California and  built on his capability to provide quick financing solutions for borrowers. Henry has  23  of years in residential, commercial, and business purpose loans secured by real estate, He is able to process your loan application quickly and give quick answers once the  property has been reviewed  to include a Title report and borrower information received.Fast answers usually usually 2-5 days.

Henry also holds a Los Angeles County Legal Document Assistant Registration which is a independent practicing paralegal.This come in handy when there are legal and title issues with a property.In order to obtain this registration,you must have completed a  accredited program in paralegal studies.In addition having and active bond.

As a Broker,he has acess to private and institutional lenders that are not be availble to the general public.Most loans are based on the value of the property and the loan to value.

Typically an asset based loan does not require exhaustive financial evaluation of the borrower.I welcome loans turned down by Banks and other Lenders.

Call Henry Munoz direct at 310-975-9739

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