Cleveland Adjustable Rate Mortgages
Definition – Adjustable rate mortgages at Cleveland Ohio Mortgage are home loans where the rate is fixed for a certain amount of time and then they go adjustable after the fixed period is up. Adjustable rate mortgages typically offer a 2, 3, 5 and 7 year fixed adjustable rate mortgages. (ie. On a 2-year fixed ARM, the rate would stay fixed for 2 years and then go adjustable after the 2-year period.)
Advantages – This loan tends to appeal to first time buyers and people with less than perfect credit. The rates on these loans tend to be .5-1% lower than a fixed rate mortgage when it comes to the sub-prime market. The point would be to get in a 2-year ARM and bring your credit score up so you will qualify for a good 30-year fixed mortgage through a prime lender by the time you need to refinance. You may also choose an ARM if you do not see yourself in your home for more than 5 yrs.
Disadvantages – Usually you will need to refinance your home once the fixed period is up on these types of loans. You will see that 9/10 times your interest rate will increase greatly once the fixed period is up due to the margin on the loan and market conditions. This is especially true with sub-prime lenders.
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Here are some of our adjustable rate loan areas in Ohio: Canton, Cincinnati, Columbus, Cleveland, Akron, Toledo, Dayton, Hamilton, Lima and Youngstown