An Overview of Adjustable Rate Mortgages

FE_DA_0723Mortgage425x283To best serve its customers, AmeriSave makes a wide variety of different mortgage loan products available, including Adjustable Rate Mortgages (ARMs). An ARM ties interest rates to an economic index. As the index changes, the interest rates and payments will undergo periodic adjustment. Often, the initial rate will stay valid for a period of one, three, or five years and will then undergo adjustment on an annual basis. AmeriSave clearly outlines the stipulations of its ARMs to provide customers with all the tools necessary to make the best decision for their individual circumstances.

Many individuals choose an ARM despite the possibility of a rise in payment because initial rates often prove lower than those offered for fixed-rate loans. The decision depends heavily on how long an individual plans to stay in a home. If the borrowers will sell the home after only a few years, an ARM could save money.

AmeriSave clearly outlines the index that it will use to adjust the rates of an ARM, allowing potential borrowers to research the index’s performance in the past. Index becomes an extremely important factor in comparing two lenders. The other major factor, AmeriSave explains, is the margin, an interest rate that covers the lender’s underwriting costs and the profit made from the loan. The total interest rates represents the index added to the index rate.

A Glossary of Important Mortgage Terminology

Understanding how overwhelming the process of finding and applying for a mortgage can prove, AmeriSave has created a short glossary of the common terms related to mortgage loans to aid its customers.

Annual Percentage Rate: The offered interest rate on the loan, quoted on a yearly basis.

Closing: The process by which a seller transfers the title to the buyer. At this point, the buyer will pay various closing fees, including charges associated with origination and loan processing.

Debt-to-Income Ratio: A comparison on monthly debt payment to gross monthly income before taxes.

Escrow Account: The lender deposits part of the monthly payments made by the borrower into this account to cover property taxes, mortgage insurance, and homeowners insurance charges.

Mortgage Insurance: A policy that protects the lender from losses if the borrower defaults on monthly loan payments.

Rate Lock-In: A written commitment to a specific APR for a predetermined amount of time before closing.

About AmeriSave: One of the most trusted home loan providers, AmeriSave approves mortgages for customers around the country. AmeriSave ensures that the application process is as quick and transparent as possible for its customers.

AmeriSave: The Advantages of an FHA Loan

Providing a variety of FHA-backed and other types of loans with
fixed- and adjustable interest rates, AmeriSave serves customers in 49
states. The company offers a simple, online application and approval

If you are a potential homebuyer looking for a stable
mortgage with a low down payment and flexible credit requirements, a
loan backed by the Federal Housing Administration may be the best choice
for you.

While FHA mortgage loans often feature higher mortgage
insurance rates than other types of loans, they can provide other
significant advantages. An FHA loan may be easier to obtain in a
difficult real estate market, particularly for borrowers with low
incomes or a less-than-perfect credit history.  Lenders that offer
FHA-insured loans may be more open to looking at a client’s overall
financial picture rather than focusing on a single negative piece of

The FHA requires that the financed property be the
client’s primary residence and be occupied by the owner, rather than an
investment or rental property. Yet the property does not necessarily
need to be a single-family home: Townhomes and condominiums are also
eligible, provided that their associations receive FHA approval.

down payment on an FHA loan may be as little as 3.5  percent of the
total amount financed.  While the FHA lists its minimum credit score for
borrowers as 500, some lenders may have more stringent credit score
requirements than the FHA itself. In addition, credit issues such as a
late bill payment may result in disqualification.

If a borrower
has little or no credit history, an FHA lender will weigh other factors
that include his or her utility and rental payment history. If the
borrower has been enrolled in a credit counseling program for at least
one year and made all required payments in a timely manner, he or she
can become FHA-eligible.

Tips for Comparing Offers from Multiple Lenders

A direct mortgage lender, AmeriSave offers several mortgage products and has approved billions of dollars in home loans. AmeriSave works with hundreds of investors to raise capital for its loans.

When considering mortgage products, individuals should communicate with multiple lenders to ensure that they find the best deal for their particular circumstances. When reviewing offers, customers must ensure that they compare rates for the same type of mortgage and verify that the rates reflect the current markets. Both mortgage rates and closing costs can change rapidly and significantly, making it imperative that customers compare only offers made on the same day.

The most important points of comparison include the total of all points and the lender fees associated with the mortgage, which, in sum, give the total cost of the mortgage. These amounts are listed as section 800 and 813 on Good Faith Estimate forms. The lender with the lowest total has the best deal for the individual.

Individuals who are considering a refinance should also consider costs associated with title insurance, attorneys, and appraisals. Many of the larger lenders, such as AmeriSave, have partnerships with other organizations for cheaper rates.

AmeriSave: An Introduction to Mortgage Refinancing

In addition to providing several top-quality home loan products for new homebuyers, leading retail mortgage lender AmeriSave frequently helps clients who wish to refinance their mortgages. For many people, mortgage refinance can significantly lower monthly payments and allow them to manage their finances more effectively. Ideal for individuals and families who wish to stay in their home for an extended time, mortgage refinancing can also help homeowners receive cash from their homes for educational expenses, home improvements, and other large expenditures.

Individuals often refinance their mortgages to consolidate their debt under one loan, which makes it much easier to manage. A mortgage can also consolidate debts such as credit card and auto loans, which typically feature high interest rates, under one low monthly rate. In addition to moving from a fixed-rate mortgage to an adjustable-rate mortgage, mortgage refinancing allows homeowners to repay their loans faster and eliminate private mortgage insurance.