Like a 7/1 ARM Mortgage, a 7/1 ARM Jumbo Mortgage allows you to finance a property that might not be covered due to its cost. When you find yourself trying to finance a property that costs more than $484,530, you will find that traditional mortgages just won’t work.
How do 7/1 ARM Jumbo Mortgages work?
Just like with other types of ARM mortgages, you can expect the introductory interest rate to last for a period of 7 years before it starts to change on an annual basis. There are a lot of considerations that lenders consider when they start changing the interest rate that accrues on your mortgage.
Often this is a great option for those who want to embrace lower interest rates, but keep in mind that after the initial 7 years of the mortgage, it can get quite costly. The smart approach to this is to take advantage of it while the interest is low and refinance it before it has a chance to get out of control.
The Benefits of a 7/1 ARM Jumbo Mortgage Loan
Is the 7/1 adjustable rate mortgage jumbo right for you? There’s only one way to find out, see what kind of advantages it has over its alternatives.
· A longer introductory period keeps you saving.
The main marketing advantage that lenders have with these types of loans is that they provide a set period of time that they won’t hike up the interest rate that’s charged. By embracing the intro period of 7 years, you’ll save more over a longer period of time.
· Monthly payments tend to be more affordable.
Since the amount that’s financed has a lower interest rate over a period of 7 years, you’ll probably be paying a lot less each month than you would with a traditional mortgage. If you want to make sure that you pay less each month, this might be worth your consideration.
· You can finance more expensive real estate.
This is meant for those who might be paying more than a regular adjustable rate mortgage can provide you with. See, ARMs come with a limit of how much a lender can finance, but this is where jumbo mortgages come into play as they have a much higher limit.
Shopping around for refinancing before the 7 years is over can give you the edge that you need to make your financial state even better. Not to mention, it could help you uncover opportunities that might not have been available for you before you signed up for the initial mortgage.