FHA Loans - FHA Adjustable Rate Mortgages (ARM)
If you are looking for an adjustable rate mortgage, the best one to consider is the FHA Adjustable Rate Mortgage program (otherwise known as a Variable or ARM). This program can be used for a single to fourplex unit properties, as long as you will be a current occupant, as well as for Planned Unit Development, and FHA approved condos and townhomes.
One of the benefits of this FHA Adjustable Rate Mortgage program is that you will not be enticed by an introductory 'lower rate' that will increase significantly after your first year. With an FHA Adjustable Rate Mortgage program, you will be safeguarded against these outrages rate hikes that can lead to your inability to maintain your mortgage payments.
With this FHA Adjustable Rate Mortgage program, the annual changes in the interest rate are typically 1% in comparison to the 2% change in other conventional adjustable loans.
Throughout the life of an FHA Adjustable mortgage, your interest rate will never go over 5% of your initial rate. This is lower than the 6% you typically see in other conventional adjustable mortgages. This means that at the worst case scenario an FHA adjustable mortgage will adjust to the highest interest rate in 5 years. With other adjustable mortgages, you can see the highest interest rate in as little as 3 years.
Another benefit of this FHA adjustable rate mortgage is that you have the flexibility to STREAMLINE REFINANCE to a fixed rate mortgage at any time. This flexibility is not available in many other types of adjustable rate loans.
