• Jessica Goldberg * NMLS #1713098

    ~Email: jessica.goldberg@cardinalfinancial.com ~Cell Phone: (612) 718-6763

    ~Office Phone: (702) 945-0281

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  • Adjustable-Rate

  • Fun Fact about Minnesota: Minnesota's nickname is "The Land of 10,000 Lakes." but it has at least 11,842 lakes of 10 acres or more. If you count the smaller lakes, the number goes up to as many as 15,000. Minnesota has more recreational boats than any other state: one per every six people. 

  • With an adjustable rate mortgage (ARM), the interest rate may go up or down. Many ARM's will start at a lower interest rate than fixed rate mortgage. This initial rate may stay the same for months or years. When this introductory period is over, your interest rate will change and the amount of your payment will likely go up. 

  • Components of ARMs
    • Index- referred to as the cost of money. Because of the market forces, the index fluctuates during the term of the loan, causing the borrowers actual interest rate to increase and decrease.
    • Margin- referred to as a spread. Remains fixed or constant for the duration of the loan.
    • Rate adjustment period- the length of time between interest rate changes with ARMs. 
    • Interest rate caps (if any)- limit the number of percentages points an interest rate can be increased during the term of a loan, helps to eliminate large fluctuations in mortgage payments. 
      • Interest rate floor- where the ARM begins. Is the period of time subject to the initial, start, or teaser interest rate.
    • Conversion option (if any)- gives the borrower the right to convert from an adjustable rate loan to a fixed rate loan.
  • Tip: Know how our ARM adjusts

    Before taking out an adjustable rate mortgage, find out:

    • How high your interest rate and monthly payments can go with each adjustment.
    • How frequently your interest rate will adjust. 
    • How soon your payment could go up.
    • If there is a cap on how high your interest rate could go. 
    • If there is a limit on how low your interest rate could go. 
    • If you will still be able to afford the loan if the rate and payment goes up to the maximum allowed under the loan contract. 

    Do not assume you'll be able to sell your home or refinance your loan before the rate changes. 

    The value of your property could decline or your financial condition could change. If you can't afford the higher payments on today's income, you may want to consider another loan.