Flexible Financing for a Changing Future
A 7/6 Adjustable-Rate Mortgage, or ARM, gives you a fixed interest rate for the first seven years of your loan. After that initial fixed-rate period, your rate may adjust every six months based on market conditions.
This can be a great option if you plan to sell, refinance, or make a change before the fixed-rate period ends. It may also be a good fit if you want a lower initial rate compared to some fixed-rate mortgage options while still having several years of predictable payments upfront.
How a 7/6 ARM Works
With a 7/6 ARM, your interest rate stays the same for the first seven years. After that, the rate may adjust every six months for the remainder of the loan term.
When your rate adjusts, it is based on a market index plus a set margin. Your loan documents will explain how often your rate can change, how much it can change at each adjustment, and the maximum amount it can increase over the life of the loan.
Why Choose an ARM?
A 7/6 ARM may offer a lower starting interest rate than a traditional fixed-rate mortgage, which can mean a lower initial monthly payment.
That lower starting payment may give you more flexibility in your monthly budget, help you afford the home you want, or allow you to put additional money toward your principal balance during the fixed-rate period.
Is a 7/6 ARM Right for You?
A 7/6 ARM may be a smart option if you do not expect to stay in your home long term, plan to refinance later, or want to take advantage of a lower initial rate.
Because your rate can change after the first seven years, it is important to understand how adjustments work. Our Mortgage Loan Officers can walk you through the details, answer your questions, and help you decide whether a 7/6 ARM fits your homebuying plans.
