More affordable and safe. Fixed Rate Mortgages have been stubbornly hovering around 7%. This makes buying your new home seem unaffordable. The general thought process in the market is that mortgage rates will move lower in the near future. This is making many prospective buyers wait. The problem is waiting will end up costing you more money. When mortgage rates fall, home prices rise eliminating any savings you thought you would have. There is a program that is safe and affordable that can help you buy today. The 5/1 ARM. The biggest appeal of a 5-year ARM is the lower initial interest rate, often significantly below that of a 30-year fixed mortgage. This can mean lower monthly payments and greater affordability upfront. A 5/1 ARM is a smart fit for buyers who plan to move, sell, or refinance within five years. Why pay for a 30-year fixed rate if you will not stay that long? With lower initial payments, borrowers can free up cash for renovations, investments, or other financial goals during the fixed-rate period. The reduced rate on a 5-year ARM can increase a borrower’s purchasing power, allowing them to qualify for a more expensive home or afford a more competitive offer. If rates drop or stay stable, many borrowers refinance before the adjustment period starts—potentially locking in another low rate or switching to a fixed mortgage. When mortgage rates are high but expected to fall in the future, a 5-year ARM lets borrowers avoid locking into long-term high interest while retaining flexibility. A 5/1 ARM may be just the right product for today.
