Adjustable Rate Mortgage & Home Equity Credit Lines Have a Niche in the Home Loan Industry

By: by Arthur Nourian

Anyone who thinks that adjustable rate mortgage loans don't have a niche in the mortgage market, better think again. Adjustable rate mortgages are also called ARM's by loan officers, underwriters and savvy consumers. ARM's have significantly increased in popularity over the last few years, with the advent of loans like the payment option ARM, and the interest only loan that offers a fixed interest rate for a period of 3, 5,7, or 10 years before converting to adjustable rate loans. Clearly ARMs have a place in the mortgage industry, but they should not be abused, and borrowers should know exactly what they are getting themselves into.

Good loan officers will discuss and consider factors such as how long you plan on dwelling in this home, and how much of a payment you can afford each month for a mortgage payment. Be careful getting yourself into an adjustable rate mortgage just to qualify for a home loan. You should be able to afford the fully-indexed payment so that when the intro fixed rate converts to a variable rate you will be able to afford the new mortgage payment. So you may want to consider purchasing a house that cost less if that is the case with you.

How stable is your job? Taking on an adjustable rate mortgage or variable rate home equity credit line always has its risk, so you want to make sure that your income, and employment are stable. If your pay is erratic, then an ARM may not be for you.

Find a mortgage broker or home equity lender to work with that you can trust. It is imperative to partner with a loan officer who understands your needs, and is smart enough to help you get approved for the best possible loan.

It is crucial that you know the specifics of your loan before you sign loan documents. Review the good faith estimate with your loan officer and your accountant. Find out what the pre-payment penalty terms as well. You need to know what it will cost you if you refinance in the next few years. You also need to know what it will cost you if you decide to sell your home in the next 2 years. Get these terms in the beginning of the loan process, so that you can make a sound decision when shopping loans online.

Art is one of the most respected mortgage writers for home loan related topics. To learn more about interest rates, purchase mortgages, and home equity loan products and current interest rates, please visit, Home Equity Loan Rates Online . Art suggest visiting the mortgage loan resource center at the QuickRateFinder.com and learn more about the current Home Mortgage Rates for Purchase & Refinance . If you need additional help or advice from some top notch loan professionals, visit the good people at Bridge Mortgages and ask then about their "No Money Down" home loan specials for 100% Home Mortgage Loans .

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