So, are you interested in ARM loans, San Antonio, TX? For most states, you can qualify for ARM loans (or Adjustable-Rate Mortgage) if you have: (1) a minimum of 5% to put down (2) a minimum FICO score of 620, and (3) a debt-to-income ratio of no more than 50%. Take note that there are some other requirements that you need to meet also to increase your chances of approval.
If you plan to apply for ARM loans, San Antonio, TX, it makes sense to know some information that will come in handy at the time of your application. Thus, we have below two of the most important and frequently asked questions (and the answers) for your perusal.
What’s the difference between a fixed-rate and adjustable-rate mortgage?
With a fixed-rate mortgage, the interest rate and monthly principal and interest payment do not change throughout the entire duration of the loan. The latter, on the other hand, the interest rate varies periodically, and the amount you pay may go up or down – depending on the market condition.
What are the key considerations when applying for ARM loans in San Antonio, TX?
For one, you have to consider the length of time you plan to stay in your home. If you are only staying for no longer than the introductory interest rate period – typically lasting between three and seven years – then it may be worth looking into an ARM. That is because the initial interest rates are usually low, and you can capitalize on it. However, if you are staying beyond that, it makes more sense to consider a fixed-rate mortgage.
Also, it is crucial to consider the direction of interest rates. It does not make sense to consider adjustable-rate mortgages if they have been rising. The opposite of the coin is also true. If the interest rates have been trending downward, it makes sense to consider an ARM loan.