Brock White
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Adjustable Rate Mortgages

Also called ARMs, adjustable rate mortgages have a unique interest rate feature that changes, or adjusts, over the life of the loan. An ARM may be attractive to you if you desire a slightly lower interest rate during the initial stages of owning your home, if you expect that your income will rise in the future, and/or if you are not planning to stay in the same home for long. Also, an ARM may have an initial interest rate lower than a fixed rate loan.

Depending on your loan’s requirements, your initial payments will be at a fixed interest rate. Afterwards, your interest rate will be adjusted by adding a pre-determined margin to a specific index such as Treasury bills or COFI (Cost of Funds Index). ARMs are generally referred to as 1/1, 3/1, 5/1, and/or 7/1 —this means that the initial fixed interest rate period is for 1,3,5, or 7 years, respectively, and then the rate is adjusted every year for the life of the loan. In addition to the adjustment period (3/1, 5/1, and/or 7/1), there are other types of ARMs, including:

Jumbo ARMs:
These specific adjustable rate programs are designed for mortgages over $417,000.

Construction Mortgages:
We offer both lot loans and construction loans which can be combined into one single closing.

Home Equity Lines of Credit (HELOC):
These variable rate loans allow homeowners to tap into the equity they’ve invested in their homes. Unlike an adjustable rate mortgage, your interest rate may change more often than a typical ARM.


It's easy to apply for a loan with the State Bank of New Prague

You can: