More information of Adjustable-Rate Mortgage Refinance
If you already have an adjustable-rate mortgage (ARM), you are familiar with installments or monthly payments that vary after a certain time.
This is because the ARM payments change based on the SOFR index or the US Prime Rate. For this reason, your payments are conditioned by each adjustment period and you have no control over its ups and downs.
When you opt for BoFA's Adjustable-Rate Mortgage Refinance, you'll get lower initial interest rates. In fact, your first monthly payments will be cheaper than with a fixed-rate mortgage loan.
However, once the term with fixed interest ends, your installments will be subject to the rates that we already mentioned, and may go up or down.
Although these mortgages are classified as variable, they are actually mixed. This is because they are made up of a fixed-rate term and an adjustable-rate term.
With Bank of America you have options like 5y/6m, 7y/6m and 10y/6m. The first digit tells you the years of fixed interest and the second tells you the time of each review of the variable rate, which in this case is 6 months for all modalities.
When refinancing your mortgage loan, always consider the best alternatives available and take into account the following:
- You have reason to believe that rates will go down in the future
- You want to start paying a new mortgage with lower monthly payments than with a fixed rate
- You are thinking of moving or selling your house or apartment before the end of the fixed interest period
If you want to compare adjustable-rate mortgage refinancing, at Busconómico you will find the best available alternatives.
Español: Refinanciación hipoteca variable de Bank of America