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Real Estate §
Eileen M. Day REALTOR
UP in ARMS
There are many adjustable rate mortgages (ARMS) available. There are 1. 3. 5, and 7-year ARMS Just to name a Few. These ARMS have a fixed Interest rate for the above specified periods and are adjustable thereafter.
ARMS generally have 'change date caps' and 'lifetime' caps. A .typical change date cap Is 2% and a typical lifetime cap Is 6%. .What this means is that on any Change date, the Interest rate may Increase or decrease by a maximum of 2 points, but over the life of the loan, the Interest rate will not Increase or decrease more than 6%.
One of the benefits of an adjustable rate loan Is that If a home buyer does not qualify for a fixed rate loan, he may qualify at the lower Initial rate of an adjustable rate loan. Some ARM programs require that the -homeowner be qualified at the maximum first Interest rate change If he is not making a .substantial downpayment (20% •or more). This Is to Insure that >e will not experience ‘Payment Shock* If his mortgage payments Increase the maximum amount.
If there Is anything we can do to help you In the field of real estate please stop In at EILEEM M. DAY. Realtor, the Clopton House. Washington. Va.. 22747. Phone 673-3033. We're here to help.__
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