Using an ARM Mortgage Calculator
An ARM Mortgage Calculator can help you understand the ARM
Mortgage Program better!
This is an important mortgage tool since an ARM
(short for Adjustable Rate Mortgage), does not contain a fixed
payment every year, but rather a payment that adjusts itself
according to current interest rates.
So, just because you have a low payment this year
does not mean you will next year, and vice versa.
How Can an ARM Mortgage Calculator Help
An ARM calculator supplies many functions that
other mortgage calculators cannot.
Why Use an ARM Mortgage Calculator?
- By using an ARM mortgage calculator you can determine
what your specific payment may be during an interest rate phase and
whether it would still be feasible for you at that time.
- You can also determine what your starting monthly payments
would be and the total interest would be according to your
individual ARM loan terms.
- Your interest rate may also be fixed for a certain amount of
months before it becomes eligible for adjustments. An ARM
calculator is the tool that will let you factor this fixed period
into your anticipated payment schedule.
The best reason to use an ARM calculator is
to determine what your overall maximum payment may be based on your
own individual factors.
For example, If you input 60 months before and 12
months between your adjustments, your expected adjustment rate at
0.25%, and your interest rate cap at 12.000%, then an ARM
calculator can tell you what your monthly maximum payment will
In this case the payment is $787.77. You can then
determine if you "would be able to make that maximum payment."
It is best only to apply for a loan if you know you
will be able to make the maximum monthly payment that an ARM
mortgage calculator generates for you!