What is a 30 year arm mortgage?
Written By: admin on July 19, 2009
One Comment
My 5/1 arm just expires and now on my statement it reads. "30 year arm." I know the intrest rate change but does this mean I am lock for 30 year at this intrest rate? Or will it change next year and so on? Also, will I be paying the principle or just interest again?
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Tags: arm mortgage, intrest rate, principleTags: intrest rate, principle
It will still adjust every year. The 30 year part means that when they compute your monthly payment, based on this year’s interest rate, they are basing the calculation on the thought of paying the loan back over 30 years.
In other words, if your interest rate is 5% this year, then your payment would be the same as a 30 year fixed at 5%. But, it will still adjust to current market rate again each year, changing your payment accordingly.