Adjustable-Rate Mortgages (ARMs)
Are you looking for an adjustable-rate mortgage in Central or North Central PA? As a longtime community bank serving the people of Juniata, Huntingdon, McKean, Mifflin, Perry, Centre, and Potter counties, JVB offers local expertise in the mortgage application and home buying process. All of our lending decisions are made locally, giving us greater flexibility to help you find the right mortgage loan for your needs.
What is an Adjustable-Rate Mortgage?
JVB offers adjustable-rate mortgages, also known as ARM loans, as part of our overall menu of Mortgage and Home Equity Loan options.
With an ARM loan, you get an introductory period of 5 or 7 years to enjoy a fixed annual percentage rate and monthly mortgage payment. After that, your rate will adjust up or down annually.
ARM Loan Benefits
- Lower initial rate and payment: Adjustable-rate mortgages almost always offer a lower annual percentage rate than fixed-rate home loans, at least initially. That also means a lower monthly mortgage payment.
- Potential for the rate to adjust down: Once your fixed-rate period ends, your interest rate will be tied to a market index.
- Available with Government-Backed Loans: If you’re considering the FHA program, you can choose an adjustable-rate FHA loan.
When to Choose an Adjustable-Rate Mortgage
The lenders at JVB can help you weigh the pros and cons of each loan type against your current financial situation and needs. Keep in mind that you can obtain an adjustable-rate on different types of mortgages, such as a jumbo loan. When it comes to ARM loans, your top considerations should be:
- Does the ARM loan offer a lower introductory rate than the fixed-rate mortgage option? If so, it may be worth it to take the savings in the beginning and then take your chances that the rate will adjust down instead of up.
- How long do you plan to stay in your new home? Even if you plan to keep your home long-term, you can always refinance your ARM loan at the end of the introductory period.
Bank Right at JVB
From 1867, when JVB opened its first location, to the present day with 15 community offices in Blairs Mills, McAlisterville, Mifflintown, Port Royal, Richfield, Port Allegany, Lillibridge, Burnham, Reedsville, Lewistown, Millerstown, Coudersport, Liverpool, or our loan office in State College, our priority has always been to provide the best financial services for our customers. Whether you are looking for a mortgage or any of our other personal and business lending products, you can expect the highest levels of integrity and respect from our team of lenders and branch employees.
Contact us to learn more about ARM Loans!
Is an Adjustable-Rate Mortgage the best option for your home purchase or mortgage refinance? Our Pennsylvania-based loan officers can help you determine your eligibility and explore your home loan options. JVB is a trusted local mortgage lender with a long history in your Central PA or Northern Tier community.
Whether in person or online, the mortgage team at JVB is ready to answer your questions about ARM loans and the application process. Call the JVB Customer Care Center to be connected to one of our experienced home loan lenders at 1-855-582-5101, visit a JVB community office near you, or apply online today. We look forward to hearing from you!
Adjustable-Rate Mortgage FAQs
An adjustable-rate mortgage consists of an initial interest rate and period of time when that rate stays the same. For example, a 5-year ARM will maintain the same introductory rate for 5 years.
Next comes the adjustment period, which is usually one year. This means the interest rate will only be adjusted annually after the introductory period ends. For example, a 5/1 ARM loan means a 5-year introductory period followed by an annual adjustment of the interest rate.
The answer to this question depends on your specific situation and needs. ARM loans generally offer lower rates during the introductory period than fixed-rate mortgages.
If you don’t plan to stay in the house long-term, expect your income to rise, or simply feel comfortable with the uncertainty of future market interest rates and want to take the chance that rates will be lower by the time your introductory period ends, an ARM loan may be the best choice for you. Keep in mind that you can always refinance your ARM loan once the introductory period ends.
Once your ARM loan enters its adjustable period, the annual calculation depends on the market index tied to your loan and the margin. Simply add the index rate to the margin (the percentage added by the lender to the index) and you’ll get the fully indexed rate, which determines the amount of interest you pay each month.