Adjustable-Rate Mortgages El Paso, TX

Lower, More Flexible Rates

adjustable rate mortgages el paso tx

What Is An Adjustable-Rate Mortgage?

An adjustable-rate mortgage (ARM) in El Paso is a form of mortgage loan in which the interest rate adjusts on a regular basis throughout the loan’s term.

Depending on market conditions and the lender’s criteria, the rate may be modified up or down. The adjustment is normally performed on a yearly basis, but it can also be performed on a monthly basis. Some ARMs also include a cap, which limits the maximum interest rate that can be charged during the life of the loan.

Borrowers like ARMs because they might start with a lower interest rate than a fixed-rate mortgage. However, there is a possibility that the rate will shift much higher over time, resulting in potentially greater payments.

How Does An Adjustable-Rate Mortgage Work?

An adjustable-rate mortgage (ARM) in El Paso is a form of loan in which the interest rate adjusts on a regular basis over the life of the loan, often at one, three, or five-year intervals.

This form of mortgage is generally employed by borrowers who anticipate staying in their house for a relatively short amount of time.

Borrowers can take advantage of lower interest rates initially by choosing an ARM instead of a fixed-rate mortgage, without getting trapped into a higher rate if interest rates rise later.

Types of ARMs in El Paso, TX

Not sure if an adjustable rate mortgage is right for you? Here’s a few of your options to help you decide!

  • Introductory Rate Adjustable Mortgages – Get a lower initial interest rate for the first few years of your loan term.
  • Annual Adjustment Mortgages – Stay ahead of rising rates by locking in adjustments once per year.
  • Bi-annual Adjustment Mortgages – Have peace of mind with fixed payments every six months.
  • Graduated Payment Adjustment Mortgages – Choose this option for a low introductory payment that increases gradually over the life of the loan.
  • Interest Only Mortgage – Keep your payments manageable by paying only the interest portion during the first few years.

Pros and Cons of an Adjustable Rate Mortgage

Adjustable-rate mortgages (ARMs) in El Paso have both pros and cons. The biggest upside of choosing an ARM is affordability – with a dynamic interest rate, you could potentially score a lower monthly payment than with a fixed-rate mortgage.

On the flip side, if the market-influenced rate increases, so will your payments – sometimes by as much as 10%.

Finally, if you don’t envision staying in your current home for the long haul, it may not be worthwhile to go the ARM route – because you wouldn’t have sufficient time to make up for any increase in payments. Before settling on a choice, it’s important to carefully examine your current financial circumstances.

ARM Mortgage FAQs

What are the pros and cons of Adjustable-Rate mortgages?

Opting for an adjustable rate mortgage in El Paso may allow borrowers to gain access to a more favorable interest rate, but they should be aware that their payments could become more expensive if market interest rates increase.

Is an ARM a good idea?

Considering an Adjustable Rate Mortgage (ARM) in El Paso could be a wise decision if your situation is subject to change in the foreseeable future – such as if you intend to move or sell your home.Enjoy the stability of the fixed-rate period, then make the sale prior to when it comes to its end and the highly variable adjustable phase commences.

What happens at the end of an ARM mortgage?

Upon completion of an ARM mortgage, you will have fulfilled your financial obligation and can bask in the pride of owning the home outright.

Team LoanStar360

Areas we serve around El Paso, TX

Our Local El Paso, TX Mortgage Company Serves Clients In The Following Cities

Our Local El Paso, TX Mortgage Company Serves Clients In The Following Counties