The 1, 3, & 5 Year House Arms Graphs

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Understanding mortgage graphs and different loans is important when buying a house. See why in this free video on real estate and bank loans.

Part of the Video Series: How to Pick a Mortgage
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Video Transcript

My job as a mortgage loan officer is to find out what kind of mortgage fits your needs. There's a hundred different mortgages out there. They all have a specific niche that they can supply to the customer. I'm going to talk in general about six of those that is an overlook of the mortgages that are out there. We've already talked about the thirty year fixed rate. Now we're going to talk about a three year ARM and a one year ARM. What is a three year ARM? A three year ARM is a mortgage that is fixed for three years, that interest rate is fixed for three years but it's amortized over thirty years. When would you use something like this? Well, you would use something like this say when your child is a junior in high school, you and your wife want to move after your child graduates, you're in a high interest rate right now, you want to go to a lower interest rate. So usually three year ARMs, and we're going to talk about a one year ARM, the interest rate is a little bit less than a thirty year fixed because it has different needs and our job is to find out if that is what fits needs that you need at that particular time. The other one is a one year ARM that's set up, a fixed interest rate for one year and it's amortized over thirty. That has a particular niche. If somebody is in a position where their other mortgage has come due and it's a higher interest rate and they want to go into a lower interest rate. There are also five and ten year ARMS but they're all amortized over thirty years. When you hear the word five year ARM it means that your interest rate is fixed for that period of time. Those are some questions that you should ask your mortgage loan officer if the loan is fixed for the years that it says. We'll be getting in some other loans here.


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