Florida Ajustable Rate Mortgages

Adjustable-Rate Mortgage (ARM): These mortgages loans have interest rates charged based on a specific interest-rate index.

If the interest-rate index rises, the Mortgage Loan interest rate and your monthly payment go's up. If the interest-rate index falls, the mortgage loan interest rate and monthly payment go down.

ARM's may have a fixed period , 3, 5, 7, or 10 years at the beginning of the loan term. Most often following these time frames the loan falls in to an annually adjustable period. Some banks/lenders may have it transition into a quarterly or monthly adjustable period. All ARM's are also based on an amortization schedule generally 20 or 25 years. Take notice that your ARM no matter what the amortization schedule be, it may contain a balloon feature causing the promissory note to be paid at an earlier date.

As with any mortgage loan you should ask for if you have not been given one - an Adjustable-Rate Mortgage (ARM) Disclosure: This document describes the features of the adjustable-rate mortgage (ARM) loan program you may be considering. This should include information about how your interest rates and payments are determined, and how your interest rate can change along with how your monthly payment will be impacted by this change.

The lender is required to provide this document to you along with other disclosures including a good faith estimate (GFE) and a truth-in-lending statement (TILA) when you have completed and handed in your application or before you pay a nonrefundable fee (whichever is earlier). At Solutions First Mortgage Inc. we do not charge an application fee.

At Solutions First Mortgage Inc. we believe an Adjustable-Rate Mortgage Loan should only be used for people who intend on only to hold the property for a short period of time, generally less than three years. Most often these types of loans are best used for someone like a real estate investor who has a strategic plan to purchase for a short period of time. Whether to renovate and flip or to create an income generating property or lease option property.

The purchaser should have a very good understanding of real estate market trends, market fluctuations, and market risk. A good real estate investor should always have a good exit strategy.

A consumer on a fixed income, who does not have the means or the ability to increase their income on short notice and cannot sustain the higher income long period of time should not consider an Adjustable-Rate Mortgage Loan.

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