Adjustable-rate mortgages (ARM) feature monthly payments that can move up and down as interest rates fluctuate. They are good options for homebuyers who expect to refinance early or plan to sell after a few years. Most have an initial fixed-rate period during which the borrower’s rate does not change, followed by a longer period during which the rate changes at preset intervals – typically on an annual basis. Interest rates charged during the initial fixed-rate period are generally lower than those on comparable fixed-rate mortgages.

After the fixed-rate period ends, an ARM’s interest rate moves up and down with another interest rate, called the index. The index is an interest rate set by market forces and published by a neutral party.

Low interest rate and monthly payments over an initial period for buyers planning ahead.Adjustable Rate Mortgage

ARMs typically include caps to protect borrowers from huge year-to-year increases in monthly payments. Caps may include a limit on how much the interest rate can change from one year to the next, a lifetime rate cap, or a limit on the amount the monthly payment can rise over the life of the loan in dollars, rather than how much the rate can change in percentage points.

eLucid offers ARMs in a range of terms including 3/1, 5/1, 7/1, and 10/1. The first number in the term represents the initial term. The second number represents the frequency of adjustments after the initial term. Therefore, a 3/1 ARM offers a fixed rate for an initial 3-year period followed by adjustments on an annual basis.

Calculate monthly payment and amortization.

Features and Benefits

• Lower initial interest rate
• Lower initial monthly payments
• Good option for home buyers who plan to refinance early
• Good option for home buyers who plan to sell their home before the initial term ends

Programs available to qualified borrowers only. Some Restrictions may apply. Programs subject to change without notice. Contact eLucid for more information.

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