"Ray handled our property as a rental first, the tenants were interested in buying. Ray helped both sides come to an agreement on terms and helped us every step of the way. He kept us informed which to me is critical! It is a pet peeve of mine when realtors ignore you or only call when there is a problem. Ray was never 'that' realtor! It was simple and unstressful, how all transactions should be! One word AWESOME! Ray was the perfect person for the job, after I spoke with him I was sold!" Dawn Wilcox
"It was an excellent selection Mr Armstrong was the best Agent we have ever dealt with (in12 moves). He is very professional, knowledgeable, personable. He took everything and followed through and kept us completely informed. To sum it up, I just can't say enough good things about dealing with him. He is the best of the best. The type of Agent you could ever hope to have the pleasure to deal with in real estate. It was a very easy transition from listing to closing. We listed on Thursday and under contract on Sunday." Ken and Darlene Collette
In all our dealings with Realtors over the past ten years, we have never met anyone as helpful and energetic as you have been. Without hesitation, we would highly recommend your service to anyone who is looking for an experienced Realtor who cares about getting things done and doing them right! Thanks for taking such good care of us, we couldn't have done it without you!
Thank you so much for taking the extra effort to make our first home purchase successful. You were there guiding us through all the crucial and important steps! You really listened to what we wanted in our home and you found exactly what we were looking for - at an amazing price! If we ever outgrow this home, we'll definitely be calling you!
You made buying a home so easy for my wife and I. We were grateful for how much patience you used in answering all of our questions and taking us to look at so many houses. You never pushed us into looking at something we were not interested in. We strongly recommend you to anyone looking at buying a new home.
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Adjustable Rate Mortgages - The Basics

An adjustable rate mortgage (ARM) has an interest rate that fluctuates periodically. This is in contrast to a fixed rate mortgage, which always has the same interest rate.

Every ARM has basic components:

  1. An index
  2. A margin
  3. Adjustment Period
  4. An interest rate cap
  5. An initial interest rate

The Index

An ARM’s interest rate is tied to one of many economic indices, some examples of which are the 1-year constant maturity Treasury security, the Cost of Funds Index, or the London Interbank Offered Rate. Different indices move at different rates so know the characteristics of the index used for your ARM.

The Margin

The interest rate for your ARM will be calculated by adding a margin to the interest rate from the index. The margin is basically the markup charged by the lender that allows them to make a profit off of your loan, such as adding 2% to the index, where the 2% is the margin. The margin of your loan usually does not fluctuate.

The Adjustment Period

The Adjustment Period controls when and how often your interest rate changes. For example, if your ARM has an adjustment period of 1 year, your interest rate will be subject to change at the end of each year and your monthly mortgage payment will be recalculated to reflect this change.

The Interest Rate Cap

Interest rate caps are built into the loan to protect the borrower from drastic interest rate fluctuations. The caps limit how much the interest rate or monthly payment can change at the end of each adjustment period. An ARM can also have a cap for the life of the loan. For example, during the life of a loan, the interest rate can only be increased by 5%.

The Initial Interest Rate

The Initial Interest Rate is the interest rate that you start with at the beginning of your loan period. The length of time your loan stays at this rate is built into the loan. For example, you may stay at the initial interest rate for 1 year, 5 years, or another length of time depending on your specific mortgage. This type of ARM is generally referred to as a Hybrid ARM. The initial interest rate for an adjustable rate mortgage is generally lower than that of a fixed rate mortgage.

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