If you are looking for the security of a fixed rate mortgage and the flexibility of an adjustable rate mortgage, a convertible adjustable rate mortgage might be the perfect program for you. Finding convertible ARMs may take a bit of research as most companies do not offer them.
Why Consider a Convertible ARM?
Convertible adjustable rate mortgages feature the low introductory rates of adjustable rate mortgages plus the option to convert the ARM to a fixed rate during the introductory period of the loan. You get to save money by getting one of the lowest introductory mortgage rates on the market while taking on less interest rate risk. If you believe that rates are beginning to rise, you would typically have to call the bank and tell them to lock in their current fixed rate offering. With some lenders, you may be able to do this prior to the loan closing or up to the first sixty months of the loan. With Ohio Savings Bank’s old product, you could try to time the market and if rates started to inch upward, you could have chosen the best rate from seven days since you called. As previously mentioned, very few lenders still offer these products you may be able to find a couple here and there that offer similar options.
Please note that the rates listed in the surveys on ForTheBestRate..com are not for convertible adjustable rate mortgages. You can use the survey to reach out to various lenders to inquire whether or not they offer convertible ARMs and learn about their other variable rate home loan products:
Possible Convertible ARM Programs Highlights & Benefits:
- Some offer a free conversion to a fixed rate mortgage program (40, 30, 20, 15, or 10 year terms).
- You may also be able to use these programs to qualify for more house. If you know that your income will be increasing in the future, you can lock into the lower ARM rate to save money and keep your payment low – then to switch to a fixed once your income increases.
Convertible adjustable rate mortgages may be a great way to get a low mortgage rate while reducing interest rate risk. The companies located throughout this site to find out about their adjustable mortgage rates and programs.
Find out more about some of our adjustable rate mortgage programs: