QandAs: Loans

What is a 5/1 Arm Interest Only?

Answer:
A 5/1 ARM interest only mortgage can help financially

strapped individuals afford a home loan. Due to increased property values, it has become difficult for some persons to qualify for a traditional loan. Thus, many borrowers have explored their options and chosen mortgages that offer a reduced interest rate and payment.

The 5/1 ARM interest only mortgage features a five year interest only period. Throughout this period, borrowers receive a fixed rate home loan. At the outset of year six, repayment of principal begins, and the mortgage rate will adjust every year for the life of the loan. This loan is ideal for borrowers who can manage a higher mortgage payment in the future.


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