An ARM has a fixed rate for an initial period, then adjusts based on a market index. It can make sense if you plan to sell, refinance or pay down your loan before the fixed period ends.
ARMs often start with a lower rate than a fixed-rate loan, which can lower your payment in the early years.
Pick a fixed period that matches how long you expect to keep the loan.
Caps limit how much your rate can rise at each adjustment and over the life of the loan.
If you plan to move or refinance in a few years, you may pay less interest than with a fixed rate.
Use an ARM to buy a home or refinance your current mortgage in Colorado.
ARMs are available for conforming and jumbo loan amounts, which can help in higher-priced Colorado markets.
An adjustable rate mortgage is often a good fit for borrowers who:
Plan to Move Within Several Years – Selling before the rate adjusts can mean real savings.
Expect to Refinance Later – Many borrowers refinance before the fixed period ends.
Want a Lower Payment Now – A lower starting rate can free up cash in the early years.
Can Handle Payment Changes – Your payment may go up after the fixed period, so budget for it.
Meet Standard Credit Guidelines – Credit, income and down payment rules are similar to fixed-rate loans.
Answer a few quick questions about your plans, and a Woodcrest loan officer will reach out with options tailored to this loan program.
Answers to the most common questions about adjustable rate mortgages in Colorado.
Your rate stays fixed for an initial period. After that, it adjusts at set intervals based on a market index plus a set margin, within the caps in your loan.
ARMs have caps that limit the first adjustment, each later adjustment and the total increase over the life of the loan. We show you the exact caps and a worst-case payment before you choose.
Yes. Many borrowers refinance into a fixed-rate loan before or after the fixed period ends, depending on rates and their plans at that time.
It depends on your plans. An ARM can save money if you sell or refinance within the fixed period, while a fixed rate gives the same payment for the life of the loan. We compare both for your situation.
