Mortgage Payment Calculator –, mortgage calculator arm.#Mortgage #calculator #arm


Mortgage Payment Calculator

Use our mortgage loan calculator to determine the monthly payments for any fixed-rate loan. Just enter the amount and terms, and our mortgage calculator does the rest. Click on “Show Amortization” Table to see how much interest you’ll pay each month and over the lifetime of the loan. The mortgage loan calculator will also show how extra payments can accelerate your payoff and save thousands in interest charges.

Amortization Table

Mortgage calculator arm

Mortgage calculator arm

Mortgage calculator arm

Mortgage calculator arm

Whether you’re buying a new home or refinancing, our mortgage calculator can do the math for you. Simply enter the amount, term and interest rate to get your monthly payment amount. If you’re refinancing, enter the current balance on your mortgage into the loan amount section and input the new term and new rate that you’ll receive. Then click on the amortization table to see how much interest you’ll pay over the life of the loan. Add extra payments to find out how they can put your payoff schedule on the fast-track and save you thousands.

Keep in mind that this calculator only calculates the mortgage payment. It does not include taxes, insurance or other fees included in the purchase of your home.

Loan amount: The amount of money you’re borrowing. It’s the cost of your new home minus the down payment if you’re buying or the balance on your existing mortgage if refinancing.

Interest rate: The exact rate you will receive on your loan, not the APR.

Loan term: The length of time you have to pay off your loan (30- and 15-year fixed-rate loans are common terms).

Amortization table: Timetable detailing each monthly payment of a mortgage. Details include the payment, principal paid, interest paid, total interest paid and current balance for each payment period.

Monthly extra payment: Extra amount added to each monthly payment to reduce loan length and interest paid.

Yearly extra payment: Extra amount paid each year to reduce loan length and interest paid.

One-time extra payment: Extra amount added once to reduce loan length and interest paid.

Mortgage calculator arm


Types of Loan Programs: Conforming, Jumbo Loans, FRM, ARM, Balloon Mortgage, what is an arm


what is an arm mortgage

What is an arm mortgage

What is an arm mortgage

What is an arm mortgage

What is an arm mortgage

Types of Mortgage Loans

Conventional and Government Loans

Any mortgage loan other than an FHA, VA or an RHS loan is conventional one.

The Federal Housing Administration (FHA), which is part of the U.S. Dept. of Housing and Urban Development (HUD), administers various mortgage loan programs. FHA loans have lower down payment requirements and are easier to qualify than conventional loans. FHA loans cannot exceed the statutory limit. Go to FHA Programs page to get more information.

If you are looking for an FHA home loan right now, please feel free to request personalized rate quotes from HUD-approved mortgage lenders via our website.

VA loans are guaranteed by U.S. Dept. of Veterans Affairs. The guaranty allows veterans and service persons to obtain home loans with favorable loan terms, usually without a down payment. In addition, it is easier to qualify for a VA loan than a conventional loan. Lenders generally limit the maximum VA loan to $203,000. The U.S. Department of Veterans Affairs does not make loans, it guarantees loans made by lenders. VA determines your eligibility and, if you are qualified, VA will issue you a certificate of eligibility to be used in applying for a VA loan.

VA-guaranteed loans are obtained by making application to private lending institutions. If you are interesting in obtaining a VA-guaranteed loan you can try our VA loan request form.

Please see also pamphlets published by VA.

RHS Loan Programs

The Rural Housing Service (RHS) of the U.S. Dept. of Agriculture guarantees loans for rural residents with minimal closing costs and no downpayment. Visit our page RHS programs for details.

Ginnie Mae which is part of HUD guarantees securities backed by pools of mortgage loans insured by these three federal agencies – FHA, or VA, or RHS. Securities are sold through financial institutions that trade government securities.

State and Local Housing Programs

Many states, counties and cities provide low to moderate housing finance programs, down payment assistance programs, or programs tailored specifically for a first time buyer. These programs are typically more lenient on the qualification guidelines and often designed with lower upfront fees. Also, there are often loan assistance programs offered at the local or state level such as MCC (Mortgage Credit Certificate) which allows you a tax credit for part of your interest payment. Most of these programs are fixed rate mortgages and have interest rates lower than the current market.

Conventional loans may be conforming and non-conforming. Conforming loans have terms and conditions that follow the guidelines set forth by Fannie Mae and Freddie Mac. These two stockholder-owned corporations purchase mortgage loans complying with the guidelines from mortgage lending institutions, packages the mortgages into securities and sell the securities to investors. By doing so, Fannie Mae and Freddie Mac, like Ginnie Mae, provide a continuous flow of affordable funds for home financing that results in the availability of mortgage credit for Americans.

Fannie Mae and Freddie Mac guidelines establish the maximum loan amount, borrower credit and income requirements, down payment, and suitable properties. Fannie Mae and Freddie Mac announces new loan limits every year.

The national conforming loan limit for mortgages that finance single-family one-unit properties increased from $33,000 in the early 1970s to $417,000 for 2006-2008, with limits 50 percent higher for four statutorily-designated high cost areas: Alaska, Hawaii, Guam, and the U.S. Virgin Islands. Since early 2008, a series of legislative acts have temporarily increased the one-unit limit to up to $729,750 in certain high-cost areas in the contiguous United States. Permanent limits, which apply to the Enterprises’ acquisitions of certain mortgages originated prior to July 1, 2007, are set under the terms of the Housing and Economic Recovery Act of 2008 (HERA).

For every county and county-equivalent in the country, maximum loan limits for mortgages can be found at: http://www.fhfa.gov/Default.aspx?Page=185

The 2013 conforming loan limits for first mortgages remain at the limits set in 2006, 2007, 2008, 2010 and 2011:


30-Year Fixed vs, what is arm mortgage.#What #is #arm #mortgage


30-Year Fixed vs. 5/1 ARM

What is arm mortgage

Here we go again…it’s that special time where I compare two popular loan programs to see how they stack up against each other. Today’s match-up: “30-year fixed vs. 5/1 ARM.”

Everyone has heard of the 30-year fixed-rate mortgage – it’s far and away the most popular type of loan out there. Why? Because it s the easiest to understand, and presents no risk of adjusting during the entire loan term.

But what about the 5/1 ARM? Do you even know what a 5/1 ARM is? What the heck is that slash doing there!? It looks confusing.

What is arm mortgage

Put simply, the 5/1 ARM is an adjustable-rate mortgage with a 30-year term that’s fixed for the first five years and adjustable for the remaining 25 years. That means it s a hybrid ARM. Partially fixed, and partially adjustable.

After the first five years are up, the interest rate can adjust once annually, both up or down. That s the 5/1 broken down for you. Disregard that pesky slash.

It’s a pretty popular ARM product, if not the most popular. And just about all mortgage lenders offer it, including ING, via its Easy Orange Mortgage.

5/1 ARM Rates Are Lower. That s the Draw

What is arm mortgage

Well, the biggest advantage to the 5/1 ARM is the fact that you get a lower mortgage rate than you would if you opted for a traditional 30-year fixed.

As you can see from the chart I created above, the 5/1 ARM is always cheaper than the 30-year fixed. That s the trade-off for that lack of mortgage rate stability.

But how much lower are 5/1 ARM rates? Currently, the spread is 0.63%, with the 30-year averaging 3.78 percent and the 5/1 ARM coming in at 3.15 percent, per Freddie Mac data.

Since Freddie began tracking the five-year ARM back in 2005, the spread has been as small as 0.27% and as large as 1.30% in 2011.

If the spread were only 0.25%, it d be hard to rationalize going with the uncertainty of the ARM. Conversely, if the spread were a full percentage point or higher, it d be pretty tempting to choose the ARM and save money for at least 60 months.

Let s look at an example of the potential savings:

Loan amount: $350,000

30-year fixed monthly payment: $1,626.87

5/1 ARM monthly payment: $1,504.08

So you’d be looking at a difference in monthly mortgage payment of roughly $122, or $1,464 annually ($7,320 over 5 years), using our example from above. Not bad, right?

You d also pay down your mortgage faster because more of each payment would go toward principal as opposed to interest. So you actually benefit twice. You pay less and your mortgage balance is smaller after five years.

After five years, the outstanding balance would be $315,427.87 versus $312,017.26 on the five-year ARM. That s roughly another $3,400 in savings for a total benefit of nearly $11,000.

Discussion over, the ARM wins! Right? Well, there’s just one little problem

It might not always be this good. In fact, you might only save money for the first five years of your 30-year loan.

After those initial five years are up, you could face an interest rate hike, meaning your 5/1 ARM could go from 3.25 percent to 4.50 percent or higher, depending on the associated margin and mortgage index.

ARMs Are Cheap But Will Likely Head Higher

Currently, mortgage indexes are super low, but they’re expected to rise in coming years as the economy gets back on track, which it will eventually.

And you should always prepare for a higher interest rate adjustment if you’ve got an ARM. In fact, lenders typically qualify you at a higher rate to ensure you can make more expensive payments in the future should your ARM adjust higher.

So that’s the big risk with the 5/1 ARM. If you don’t plan to sell or refinance before those first five years are up, the 30-year fixed may be the better choice.

Although, if you sell or refinance within say seven or eight years, the 5/1 ARM could still make sense given the savings realized during the first five years. And most people either sell or refinance within 10 years.

Just be sure you can actually handle a larger monthly mortgage payment should your rate adjust higher. And realize that refinancing won t always be an option you may not qualify, or rates may be too expensive to justify a refi. It s never a guarantee.

If you actually plan to pay off your mortgage, an ARM could be a bad idea unless you seriously luck out with rate adjustments. Or you serially refinance and pay extra to shorten the amortization period. Otherwise, there s a good chance you ll pay a lot more than you would have had you gone with the 30-year fixed.

Why? Because each time you refinance to another ARM, you re getting a brand new 30-year term. That means more interest is paid over a longer period of time, even if the rate is lower.

However, if you’re a savvy investor and have a healthy risk-appetite, the 5/1 ARM could mean some serious savings, especially if the extra money is invested somewhere else with a better return for your money.

Five years not enough for you? Check out the 30-year fixed vs. the 7-year ARM, which provides another two years of interest rate stability. The rate may not be as low, but you ll get a little more time before that first rate adjustment.


30-Year Fixed vs, mortgage arm.#Mortgage #arm


30-Year Fixed vs. 5/1 ARM

Mortgage arm

Here we go again…it’s that special time where I compare two popular loan programs to see how they stack up against each other. Today’s match-up: “30-year fixed vs. 5/1 ARM.”

Everyone has heard of the 30-year fixed-rate mortgage – it’s far and away the most popular type of loan out there. Why? Because it s the easiest to understand, and presents no risk of adjusting during the entire loan term.

But what about the 5/1 ARM? Do you even know what a 5/1 ARM is? What the heck is that slash doing there!? It looks confusing.

Mortgage arm

Put simply, the 5/1 ARM is an adjustable-rate mortgage with a 30-year term that’s fixed for the first five years and adjustable for the remaining 25 years. That means it s a hybrid ARM. Partially fixed, and partially adjustable.

After the first five years are up, the interest rate can adjust once annually, both up or down. That s the 5/1 broken down for you. Disregard that pesky slash.

It’s a pretty popular ARM product, if not the most popular. And just about all mortgage lenders offer it, including ING, via its Easy Orange Mortgage.

5/1 ARM Rates Are Lower. That s the Draw

Mortgage arm

Well, the biggest advantage to the 5/1 ARM is the fact that you get a lower mortgage rate than you would if you opted for a traditional 30-year fixed.

As you can see from the chart I created above, the 5/1 ARM is always cheaper than the 30-year fixed. That s the trade-off for that lack of mortgage rate stability.

But how much lower are 5/1 ARM rates? Currently, the spread is 0.63%, with the 30-year averaging 3.78 percent and the 5/1 ARM coming in at 3.15 percent, per Freddie Mac data.

Since Freddie began tracking the five-year ARM back in 2005, the spread has been as small as 0.27% and as large as 1.30% in 2011.

If the spread were only 0.25%, it d be hard to rationalize going with the uncertainty of the ARM. Conversely, if the spread were a full percentage point or higher, it d be pretty tempting to choose the ARM and save money for at least 60 months.

Let s look at an example of the potential savings:

Loan amount: $350,000

30-year fixed monthly payment: $1,626.87

5/1 ARM monthly payment: $1,504.08

So you’d be looking at a difference in monthly mortgage payment of roughly $122, or $1,464 annually ($7,320 over 5 years), using our example from above. Not bad, right?

You d also pay down your mortgage faster because more of each payment would go toward principal as opposed to interest. So you actually benefit twice. You pay less and your mortgage balance is smaller after five years.

After five years, the outstanding balance would be $315,427.87 versus $312,017.26 on the five-year ARM. That s roughly another $3,400 in savings for a total benefit of nearly $11,000.

Discussion over, the ARM wins! Right? Well, there’s just one little problem

It might not always be this good. In fact, you might only save money for the first five years of your 30-year loan.

After those initial five years are up, you could face an interest rate hike, meaning your 5/1 ARM could go from 3.25 percent to 4.50 percent or higher, depending on the associated margin and mortgage index.

ARMs Are Cheap But Will Likely Head Higher

Currently, mortgage indexes are super low, but they’re expected to rise in coming years as the economy gets back on track, which it will eventually.

And you should always prepare for a higher interest rate adjustment if you’ve got an ARM. In fact, lenders typically qualify you at a higher rate to ensure you can make more expensive payments in the future should your ARM adjust higher.

So that’s the big risk with the 5/1 ARM. If you don’t plan to sell or refinance before those first five years are up, the 30-year fixed may be the better choice.

Although, if you sell or refinance within say seven or eight years, the 5/1 ARM could still make sense given the savings realized during the first five years. And most people either sell or refinance within 10 years.

Just be sure you can actually handle a larger monthly mortgage payment should your rate adjust higher. And realize that refinancing won t always be an option you may not qualify, or rates may be too expensive to justify a refi. It s never a guarantee.

If you actually plan to pay off your mortgage, an ARM could be a bad idea unless you seriously luck out with rate adjustments. Or you serially refinance and pay extra to shorten the amortization period. Otherwise, there s a good chance you ll pay a lot more than you would have had you gone with the 30-year fixed.

Why? Because each time you refinance to another ARM, you re getting a brand new 30-year term. That means more interest is paid over a longer period of time, even if the rate is lower.

However, if you’re a savvy investor and have a healthy risk-appetite, the 5/1 ARM could mean some serious savings, especially if the extra money is invested somewhere else with a better return for your money.

Five years not enough for you? Check out the 30-year fixed vs. the 7-year ARM, which provides another two years of interest rate stability. The rate may not be as low, but you ll get a little more time before that first rate adjustment.


Best 5 Year Adjustable Mortgage Rates: Compare 5, arm rates.#Arm #rates


5-Year ARM Mortgage Rates

A five year mortgage, sometimes called a 5/1 ARM, is designed to give you the stability of fixed payments during the first 5 years of the loan, but also allows you to qualify at and pay at a lower rate of interest for the first five years. There are also 5-year balloon mortgages, which require a full principle payment at the end of 5 years, but generally are not offered by commercial lenders in the current residential housing market. It is common for balloon loans to be rolled over when the term expires through lender refinancing.

How do 5-Year Rates Compare?

Teaser rates on a 5-year mortgage are higher than rates on 1 or 3 year ARMs, but they’re generally lower than rates on a 7 or 10 year ARM or a 30-year fixed rate mortgage. A 5-year could be a good choice for those buying a starter home who want to increase their buying power and are planning to trade up in a few years, but who wish to avoid a lot of short-term volatility in their payment levels.

When Are Rates The Best?

5-year ARMs, like 1 and 3 year ARMs, are based on various indices, so when the general trend is for upward rates, the teaser rates on adjustable rate mortgages will also rise. Currently rates are low, in-part because the recovery from the recession has been slow the Federal Reserve has bought treasuries mortgage backed securities in order to take bad assets off bank balance sheets drive down interest rates.

5-year ARMs are most often tied to the 1 year Treasury or the LIBOR (London Inter Bank Rate) but it’s possible that any particular ARM could be tied to a different index. These are the most common indices that banks use for mortgage indices:

  • Treasury Bill (T-Bill)
  • Constant Maturity Treasury (CMT or TCM)
  • 12-Month Treasury Average (MAT or MTA)
  • 11th District Cost of Funds Index (COFI)
  • London Inter Bank Offering Rates (LIBOR)
  • Certificate of Deposit Index (CODI)
  • Bank Prime Loan (Prime Rate)

The FHFA also publishes a Monthly Interest Rate Survey (MIRS) which is used as an index by many lenders to reset interest rates.

The initial rate, called the initial indexed rate, is a fixed percentage amount above the index the loan is based upon at time of origination. This amount added to the index is called the margin. Subsequent payments at time of adjustment will be based on the indexed rate at time of adjustment plus the fixed percentage amount, same as it was calculated for the initial indexed rate, but within whatever payment rate caps are specified by the loan terms. Though you pay that initial indexed rate for the first five years of the life of the loan, the actual indexed rate of the loan can vary. It’s important to know how the loan is structured, and how it’s amortized during the initial 5-year period beyond.

Payment rate caps on 5/1 ARM mortgages are usually to a maximum of a 2% interest rate increase at time of adjustment, and to a maximum of 5% interest rate increase over the initial indexed rate over the life of the loan, though there are some 5-year mortgages which vary from this standard. Some five year loans have a higher initial adjustment cap, allowing the lender to raise the rate more for the first adjustment than at subsequent adjustments. It’s important to know whether the loans you are considering have a higher initial adjustment cap.

Arm ratesIn analyzing different 5-year mortgages, you might wonder which index is better. In truth, there are no good or bad indexes, and when compared at macro levels, there aren’t huge differences. Each has advantages and disadvantages. One of the things to assess when looking at adjustable rate mortgages is whether we’re likely to be in a rising rate market or a declining rate market. A loan tied to a lagging index, such as COFI, is more desirable when rates are rising, since the index rate will lag behind other indicators. During periods of declining rates you’re better off with a mortgage tied to a leading index. But due to the long initial period of a 5/1 ARM, this is less important than it would be with a 1 year ARM, since no one can accurately predict where interest rates will be five years from now. With a 5/1 loan, though the index used should be factored in, other factors should hold more weight in the decision of which product to choose. The index does affect the teaser rate offered.

What Are The Benefits of a 5-Year Mortgage?

  • Lower monthly payment for the first five years of the loan
  • Ability to qualify for a larger mortgage, based on the initial interest rate
  • Ability to refinance into a fixed-rate mortgage if you are unlikely to move anytime soon

What Are The Potential Downsides?

Knowing what type of mortgage you’re getting can be a challenge, since so many things that sound like a good idea are often the things that can cost you the most money.

Though 5-year loans are all lumped together under the term five year loan or 5/1 ARM there are, in truth, more than one type of loan under this heading. Understanding which of these types are available could save your wallet some grief in the future. Some types of 5-year mortgages have the potential for negative amortization.

Negative amortization, to put it simply, is when you end up owing more money than you initially borrowed, because your payments haven’t been paying off any principle. Negative amortization can be especially devastating in times of dropping real estate values, since the total amount you owe on the mortgage is increasing while the value of the property is dropping, decreasing your equity stake. When the value of the property falls below the amount owed, this is called being under water. Some ARM contracts which allow for negative amortization have a cap of 110% to 125% of the initial loan amount. When the loan reaches this level the mortgage automatically converts into a fully amortizing mortgage which requires principal repayment.

Historical Mortgage Rates

The following table lists historical mortgage rates for 30-year mortgages, 15-year mortgages, and 5/1 ARM loans.


Best 5 Year Adjustable Mortgage Rates: Compare 5, arm mortgage rates.#Arm #mortgage #rates


5-Year ARM Mortgage Rates

A five year mortgage, sometimes called a 5/1 ARM, is designed to give you the stability of fixed payments during the first 5 years of the loan, but also allows you to qualify at and pay at a lower rate of interest for the first five years. There are also 5-year balloon mortgages, which require a full principle payment at the end of 5 years, but generally are not offered by commercial lenders in the current residential housing market. It is common for balloon loans to be rolled over when the term expires through lender refinancing.

How do 5-Year Rates Compare?

Teaser rates on a 5-year mortgage are higher than rates on 1 or 3 year ARMs, but they’re generally lower than rates on a 7 or 10 year ARM or a 30-year fixed rate mortgage. A 5-year could be a good choice for those buying a starter home who want to increase their buying power and are planning to trade up in a few years, but who wish to avoid a lot of short-term volatility in their payment levels.

When Are Rates The Best?

5-year ARMs, like 1 and 3 year ARMs, are based on various indices, so when the general trend is for upward rates, the teaser rates on adjustable rate mortgages will also rise. Currently rates are low, in-part because the recovery from the recession has been slow the Federal Reserve has bought treasuries mortgage backed securities in order to take bad assets off bank balance sheets drive down interest rates.

5-year ARMs are most often tied to the 1 year Treasury or the LIBOR (London Inter Bank Rate) but it’s possible that any particular ARM could be tied to a different index. These are the most common indices that banks use for mortgage indices:

  • Treasury Bill (T-Bill)
  • Constant Maturity Treasury (CMT or TCM)
  • 12-Month Treasury Average (MAT or MTA)
  • 11th District Cost of Funds Index (COFI)
  • London Inter Bank Offering Rates (LIBOR)
  • Certificate of Deposit Index (CODI)
  • Bank Prime Loan (Prime Rate)

The FHFA also publishes a Monthly Interest Rate Survey (MIRS) which is used as an index by many lenders to reset interest rates.

The initial rate, called the initial indexed rate, is a fixed percentage amount above the index the loan is based upon at time of origination. This amount added to the index is called the margin. Subsequent payments at time of adjustment will be based on the indexed rate at time of adjustment plus the fixed percentage amount, same as it was calculated for the initial indexed rate, but within whatever payment rate caps are specified by the loan terms. Though you pay that initial indexed rate for the first five years of the life of the loan, the actual indexed rate of the loan can vary. It’s important to know how the loan is structured, and how it’s amortized during the initial 5-year period beyond.

Payment rate caps on 5/1 ARM mortgages are usually to a maximum of a 2% interest rate increase at time of adjustment, and to a maximum of 5% interest rate increase over the initial indexed rate over the life of the loan, though there are some 5-year mortgages which vary from this standard. Some five year loans have a higher initial adjustment cap, allowing the lender to raise the rate more for the first adjustment than at subsequent adjustments. It’s important to know whether the loans you are considering have a higher initial adjustment cap.

Arm mortgage ratesIn analyzing different 5-year mortgages, you might wonder which index is better. In truth, there are no good or bad indexes, and when compared at macro levels, there aren’t huge differences. Each has advantages and disadvantages. One of the things to assess when looking at adjustable rate mortgages is whether we’re likely to be in a rising rate market or a declining rate market. A loan tied to a lagging index, such as COFI, is more desirable when rates are rising, since the index rate will lag behind other indicators. During periods of declining rates you’re better off with a mortgage tied to a leading index. But due to the long initial period of a 5/1 ARM, this is less important than it would be with a 1 year ARM, since no one can accurately predict where interest rates will be five years from now. With a 5/1 loan, though the index used should be factored in, other factors should hold more weight in the decision of which product to choose. The index does affect the teaser rate offered.

What Are The Benefits of a 5-Year Mortgage?

  • Lower monthly payment for the first five years of the loan
  • Ability to qualify for a larger mortgage, based on the initial interest rate
  • Ability to refinance into a fixed-rate mortgage if you are unlikely to move anytime soon

What Are The Potential Downsides?

Knowing what type of mortgage you’re getting can be a challenge, since so many things that sound like a good idea are often the things that can cost you the most money.

Though 5-year loans are all lumped together under the term five year loan or 5/1 ARM there are, in truth, more than one type of loan under this heading. Understanding which of these types are available could save your wallet some grief in the future. Some types of 5-year mortgages have the potential for negative amortization.

Negative amortization, to put it simply, is when you end up owing more money than you initially borrowed, because your payments haven’t been paying off any principle. Negative amortization can be especially devastating in times of dropping real estate values, since the total amount you owe on the mortgage is increasing while the value of the property is dropping, decreasing your equity stake. When the value of the property falls below the amount owed, this is called being under water. Some ARM contracts which allow for negative amortization have a cap of 110% to 125% of the initial loan amount. When the loan reaches this level the mortgage automatically converts into a fully amortizing mortgage which requires principal repayment.

Historical Mortgage Rates

The following table lists historical mortgage rates for 30-year mortgages, 15-year mortgages, and 5/1 ARM loans.


The 5, arm mortgage.#Arm #mortgage


The 5/5 ARM Loan Just Might be the Best Mortgage Loan

Arm mortgage

Want the lower initial interest rate of an adjustable-rate mortgage (ARM) with at least some of the stability of a fixed-rate loan? The 5/5 ARM might be an option.

This relatively new loan is popular among consumers who want low monthly payments but don’t want to worry each year that this payment might rise. That’s because the interest rate attached to a 5/5 ARM doesn’t reset or adjust as often as it does with a traditional loan.

Is it Right for You?

That doesn’t mean that the 5/5 ARM is the right mortgage choice for all borrowers. Even though there is less financial risk than with traditional ARMs, there is still some.

As with all ARMs, you are taking a little bit of a gamble, said John Walsh, Chief Executive Officer of Milford, Connecticut-based Total Mortgage. If after you set your interest rate for five years interest rates start decreasing, then you made the wrong decision. If rates start increasing after you set your initial rate, then you made the right decision for those five years.

Traditional ARMs are attractive because they come with lower initial interest rates. But they also come with higher risk: After a set number of years often five or seven years, but perhaps as many as 10 in which the interest rate with an ARM remains unchanged, it then adjusts every year, rising or falling according to which economic indices the ARM is attached to.

An ARM might be tied to the London Interbank Offered Rate, better known by the acronym LIBOR. After an ARM’s fixed-rate period ends, each year that loan’s interest rate will rise or fall depending on what’s happening with the LIBOR index.

There is a bit of a safety net built into most ARMs. They’ll usually come with a cap that limits how much monthly payments can rise once the loan enters its adjustable period. An ARM might have a cap of 2% plus the one-year Libor index, for example.

That’s complicated, so it’s important to ask your lender just how big of a jump your mortgage payment can take during its adjustable years. If you can’t handle the maximum possible increase? An ARM might not be for you.

Advantages of a 5/5 ARM

A 5/5 ARM, though, is a bit different. Lenders advertise it as a loan product that combines the stability of a fixed-rate loan with the low initial payments of an ARM.

Like all ARMs, the 5/5 ARM comes with a fixed-rate period. In this version, the interest rate doesn’t change for five years. After this set period ends, the rate adjusts. But it then remains at its new level for five more years instead of adjusting every 12 months.

And the 5/5 ARM will continue in this pattern until borrowers pay it off, sell their homes, or refinance to a new loan. The interest rate will remain in place for five years, adjust, remain in place for five more years, adjust, and so on.

Most 5/5 ARMs come with caps, too. If your interest rate cap is 2%, your rate can’t rise higher than that level during each adjustment period. This cap is important, letting you calculate your worst-case-scenario payment.

Say you start your 5/5 ARM with an interest rate of 3.25%. If your interest rate cap is 2%, rate can only jump to a maximum of 5.25% when your loan hits its first adjustment period after five years. That comes out to an average interest rate of 4.25% for the first 10 years of this particular 5/5 ARM.

Peter Grabel, Managing Director of Luxury Mortgage Corp. in Stamford, Connecticut, says that a 5/5 ARM might be a good choice for a younger couple looking to buy a first home. The lower initial interest rate means that this younger couple might be able to get into a larger home than they otherwise would have if they instead sought out a traditional fixed-rate mortgage with a higher interest rate.

But borrowers who apply for a 5/5 ARM need to be certain that they can afford the higher mortgage payment that might kick in after five years, Grabel said.

Maybe five years from now this young couple will be making more money, Grabel said. They might be able to afford a higher interest rate then. For people willing to take a little gamble, this is a good loan choice: They pay less now while paying potentially more in years six to 10.

Have you considered a 5/5 ARM? Why or why not?


Mortgage Calculators: Amortization Tables, Accelerated Payments, Biweekly Payments, mortgage calculator arm.#Mortgage #calculator #arm


mortgage calculator arm

Mortgage calculator arm

Mortgage calculator arm

Mortgage calculator arm

Mortgage calculator arm

Lets you determine monthly mortgage payments and see complete amortization tables.

Mortgage calculator armHow Advantageous Are Extra Payments?

By making additional monthly payments you will be able to repay your loan much more quickly. Find out how your monthly, yearly, or one-time pre-payments influence the loan term and the interest paid over the life of loan. Make additional 1/12 of monthly payments (a popular ‘do-it-yourself’ biweekly) or an additional monthly payment once a year.

Mortgage calculator armSimple Option ARM Calculator

Computes minimum, interest-only and fully amortizing 30-, 15- and 40-year payments.

Mortgage calculator armAdvanced Option ARM Calculator with Minimum Payment Change Cap

Allows you to create a complete option ARM loan amortization table (with standard and neg-am recasts, automatically estimated possible future index changes, various fixed payment periods, interest rate rounding to the nearest 1/8 of one percentage, and more). See what happens if you always select the minimum payment option.

< Please see: Using Pay Option ARM Calculator

Mortgage calculator armWhich ARM Index Is Better?

Mortgage calculator armMortgage Pre-Qualifier

Mortgage Pre-Qualifier will determine the income required to qualify for the particular loan using the specified qualifying ratios.

Mortgage calculator armHow Much Can You Borrow?

The calculator lets you see how various changes to your income, liabilities, and mortgage terms affect the loan amount you can borrow.

Mortgage calculator armBlended Rate Calculator

Calculates a first and second mortgage blended rate.

Mortgage calculator arm‘True bi-weekly’ payment calculator

Prints yearly amortization tables. With bi-weekly payments, you pay half of the monthly mortgage payment every 2 weeks, rather than the full balance once a month. This is comparable to 13 monthly payments a year, which can result in faster payoff and lower overall interest costs.

Mortgage calculator armAnother ‘true bi-weekly’ payment calculator

Builds complete bi-weekly amortization tables.

Mortgage calculator armTrue bi-weekly vs standard bi-weekly

Shows how much you will save if you calculate interest for two-week intervals and apply the bi-weekly payments less the interest to reduce principal every two weeks, instead of having your money withdrawn from your bank account every two weeks by your lender and making a full mortgage payment once a month plus one additional payment once a year out of a special account, managed by the lender. Complete amortization tables are available.

Mortgage calculator arm


Swollen Arm – Swelling of the Hand, Forearm, Fingers, 5 year arm.#5 #year #arm


Swollen Arm Swelling of the Hand, Forearm, Fingers

5 year arm

Swelling (edema) of the arm is an indication of inflammation or disturbances of blood or lymph flow causing a swollen appearance of the hand, forearm or fingers. The swelling may be accompanied by other signs and symptoms which may assist with diagnosing the cause of the swollen arm.

It is difficult to identify a causative factor for a swollen arm solely on the swelling itself. The swollen arm should be assessed in conjunction with swelling throughout the body (generalized) or in specific areas (localized). Swelling of the arm due to edema (in most cases) may be pitting (finger pressure leaves an impression on the swelling for a few seconds to minutes) or non-pitting edema. Pitting edema is usually indicative of a circulatory disorder while non-pitting edema may be an indication of a more localized cause.

Causes of a Swollen Arm

A swollen arm may be caused by a number of factors or predisposing conditions.

  • Inflammation due to trauma (blunt force), injury (broken bones), overuse and exertion, toxins (poisonous substances, insect or snake bites), burns, allergies or chronic conditions like rheumatoid arthritis, carpal tunnel syndrome, gout .
  • Lymphedema or lympadenopathy
  • Infection virus, bacteria, protozoa or fungi. Localized infection of the fingers, hand or forearm or a widespread infection of the arm as in cellulitis.
  • Venous insufficiency circulatory disorders either due to chronic conditions (cardiac, peripheral vascular disease), injury or obstructed blood flow through the arm.
  • Fat accumulation due to hypothyroidism, Cushing s syndrome or just general weight gain may cause swollen arms although this fat deposition is gradual and evident throughout the body.

Symptoms Associated with Swelling :

A swollen arm may or may not be accompanied by other signs and symptoms apart from the visible swelling.

  • Swelling causing distortion of the anatomy of the arm and related structures. This can be clearly visible when comparing the swollen arm or hand with the normal arm or hand in unilateral (one sided) swelling.
  • Pain, numbness or tingling of the arm.
  • Itching may also be experienced with or without an evident rash.
  • Redness or paleness of the arm.
  • Excessive warmth (heat) or cold and clammy skin.
  • Muscle weakness reduced muscle strength or difficulty in moving the arm or complete loss of movement of the hand, forearm or fingers.

Diagnosis Treatment :

It is important to take note of causative or aggravating factors in repeated episodes of arm swelling. A swollen arm may or may not be accompanied by other signs and symptoms and these concomitant symptoms should be reported to the attending practitioner when seeking medical attention. Most importantly, it is advisable to take note if your swelling is one sided (unilateral) or of both arms (bilateral) as this may indicate a localized or generalized nature of the condition. If you are unsure of the cause of acute swelling, always immobilize your arm and seek medical attention immediately.

  • Treatment depends on the cause of the inflammation, lymphedema, infection or venous insufficiency that is causing the swelling of the arm. Fat accumulation is usually gradual and gives the appearance of a swollen arm but is not a true swelling of the limb.
  • Swelling of the fingers may likely be due to conditions like arthritis (more commonly rheumatoid arthritis) or gout (less common) and treatment should be directed at the cause of the joint swelling.
  • It is not advisable to use a cold application such as an ice pack or immersing the hand in ice water if a swelling is noticed without identifying the cause. Cold therapy may only be useful in cases of blunt trauma immediately after the injury.
  • Anti-inflammatory drugs may be useful in reducing swelling due to inflammation as well as easing any associated pain.
  • Anti-histamines and corticosteroids may assist with swelling due to allergies or insect bites. In the event of a snake bite, seek immediate medical attention as the arm swelling may be accompanied by necrosis (tissue death). More importantly, snake venom will eventually enter the systemic circulation and can cause death.
  • Certain circulatory disorders may have serious underlying pathologies including cardiovascular disease like congestive cardiac failure, kidney failure, liver failure, aneurysms and thrombosis. These conditions need to be identified and treated accordingly.
  • Fractures (broken bones) within the arm, hand or fingers will cause swelling and severe pain upon movement. Immediate medical attention is required to prevent long term complications.
  • Inform your supervising practitioner of any medication that you may be using. Anabolic steroids (used by athletes and body builders) and certain anti-hypertensive drugs may cause arm swelling.

Management :

While a swollen arm is a non-specific symptom, it should not be ignored especially in repeat cases.

  • If the arm is turning blue or if there is a complete loss of sensation or movement, medical attention is required immediately even if this is episodic.
  • Swelling of the arm after weight training or other weight bearing exercise targeting the area is common. This is not a cause for concern unless the swelling persists or is accompanied by other signs and symptoms.
  • If you are experiencing repeat episodes of swelling and your medical practitioner has not identified any serious pathology, it is not advisable to wear tight bands, wrist watches or finger rings as this will further slow down the flow of blood or lymph.
  • Nail biters do occasionally suffer with swelling of the fingers if infection sets in (paronychia) as the mouth is laden with bacteria that will quickly infect the affected area.
  • Swelling of the arms may be common in pregnant women and are not a cause for concern.
  • Slight swelling may also occur in heat and summer months which are not serious.
  • Deep massage or manual lymph drainage as practiced in some therapeutic massage practices is not advisable for a swollen arm. The causative factor of the swelling should always be identified first and a massage can aggravate the condition.

Related Questions and Answers


Pay-Option Arm Mortgages, The Truth About, what is arm mortgage.#What #is #arm #mortgage


Option Arm Mortgages

What is arm mortgage

The option arm loan program was one of the most popular mortgage choices for borrowers in the United States during the lead up to the mortgage crisis thanks to its forgiving payment flexibility.

This same payment flexibility also made it one of the most scrutinized loan programs in history because of its misleading ability to qualify borrowers for a home they truly couldn t afford.

It was offered by some of the biggest former mortgage lenders, including Countrywide Mortgage and Washington Mutual, both of which failed during the Great Recession. I believe Bear Stearns also offered the product. They also failed.

What Is An Option Arm?

The option arm, or pick-a-pay mortgage, is a monthly adjustable rate mortgage tied to one of the major mortgage indexes, including the LIBOR, MTA, or COFI. The program allows a borrower to pay off their loan balance using four payment options, including the following:

15 year term payment (Principal and interest)

30 year term payment (Principal and interest)

Interest-only payment (Usually available first 10 years)

Minimum monthly payment (Negative amortization payment)

In other words, borrowers can make the standard 30-year fixed payment, an accelerated 15-year fixed payment, a 30-year interest-only payment, or a negative amortization payment.

That last option was what got a lot of homeowners into a lot of trouble. It allowed homeowners to pay less than the total amount of interest due, thereby pushing many borrowers into an underwater position.

Most Option Arm Holders Make the Minimum Payment

Most borrowers select the option arm for the minimum payment option, otherwise known as the negative amortization option. The minimum payment option allows a borrower to pay monthly mortgage payments that are significantly less than the actual interest rate.

The minimum payment on most option arm programs is 1% fully amortized. It seems like a great deal, but every time the borrower elects to makes the minimum payment, the difference between the minimum payment and the interest-only payment is tacked onto the balance of the loan.

A borrower can pay the minimum payment until the loan balance reaches 110-115% of the original loan balance, depending upon the rules of the issuing bank or mortgage lender. This allows the typical borrower to pay the minimum payment for roughly the first five years of the life of the loan.

After the borrower reaches 110-115% of the original loan balance (110-115 LTV), they will lose the minimum payment option, leaving them with the three remaining payment options. After ten years from the start of the loan, the interest-only option typically goes away as well, and the borrower must pay using one of the two remaining payment options.

Typical option arm programs do not have any caps aside from the lifetime cap of say 9.95%, and the minimum payment generally increases 7.5% each year until it is no longer an available option.

You re Deferring Interest with an Option Arm

What many borrowers may not understand is that paying the minimum payment each month is simply a way of deferring interest, not avoiding it altogether. By making the minimum payment each month, the accrued interest eventually stacks up against the borrower, while effectively building zero home equity.

And after five years of paying the minimum payment, the borrower would have a loan balance above their original balance without the flexibility of the minimum payment option.

This makes the option arm a dangerous choice for homeowners, as once the minimum payment option disappears the borrower has no choice but to pay the interest-only payment. And many borrowers will likely have trouble making the interest-only payment after relying on a much lower minimum payment during earlier years.

The only saving grace to this program is housing appreciation and leverage. While the market was hot, real estate investors were using option-arms to keep cash in their pockets, banking on appreciation until they resold the home years, or even months later.

But once every one and their mother was using this type of loan, trouble started brewing. It probably should have never been introduced to the masses.

1 Month LIBOR index: 5.330

Fully indexed rate: 7.980%

Loan amount: $400,000

15 year term payment (Principal and interest) = $3,817.99

30 year term payment (Principal and interest) = $2,929.48

Interest-only payment (Usually available first 10 years) = $2,660.00

Minimum monthly payment (Neg-am payment) = $1,286.56

Minimum monthly payment Year 1 = $1,286.56

Minimum monthly payment Year 2 = $1,383.05

Minimum monthly payment Year 3 = $1,486.78

Minimum monthly payment Year 4 = $1,598.29

Minimum monthly payment Year 5 = $1,718.16

Typical five-year interest-only adjustable rate mortgage at 6.75% is $2,250.00.

Monthly savings making the minimum payment = $963.44

As you can see, the minimum payment is dramatically lower than the interest-only payment, but it won t be around forever. And the minimum payment increases each year, as well as the accrued interest.

I ve seen a lot of lender commercials lately offering option-arm programs under the guise of names such as Super-Saver program and Smart Option . They tend to highlight the benefits, mainly the cost savings without mentioning the negative implications.

The newest option arm program now is the so-called assured option arm , also known as a five-year fixed option arm mortgage. It combines the safety of a five-year fixed product with the flexibility of an option arm. It can be useful for the same reasons I mentioned above, with the security of a fixed interest rate for a small time period. But it s still a risky loan product, and one that should be approached cautiously as well.

All that said, the option arm program definitely has the potential to save homeowners money, and keep money in their pocket during hard times, but it should be approached cautiously.

A loan officer or mortgage broker may recommend the option arm program as a way to keep your payments down, but if you don t feel you can make the interest-only payments in the future, and eventually the much higher fully amortized payment, it s probably best that you look for something more conventional.

If you can t make the fully amortized payment, you don t really qualify for the home loan. Bottomline.

Option Arms Banned Post-Crisis

In early 2014, the Consumer Financial Protection Bureau (CFPB) enacted the Qualified Mortgage (QM) rule, which required lenders to stop making mortgages with what they referred to as harmful loan features.

One of these features turned out to be negative amortization, meaning the option arm as we knew it was a thing of the past. Lenders get certain legal protections if they make loans that abide by the QM rule, and as such most loans are now QM loans.

However, it s still possible for a lender to offer a similar product in the future, but it s doubtful because they ll be assuming more risk. And we all know these are risky loans.

In summary, the option arm will go down in history as one of the most infamous loan programs of all time. One could easily argue that they did a lot more harm than good, and were probably one of the main reasons everything fell apart.