What Is a 7/1 ARM Loan?

A 7/1 Adjustable-Rate Mortgage (ARM) gives you flexibility, potential savings, and a way to plan for the future. At Community Trust Mortgage, we guide you through the details, helping you decide if this mortgage fits your financial goals.

How Does a 7/1 ARM Work?

A 7/1 ARM combines fixed and adjustable interest rates. For the first seven years, you lock in a fixed rate, ensuring predictable payments. After that, the rate adjusts annually based on market conditions. Because of this setup, your payments stay steady at first but may change later.

If you expect to move, sell, or refinance before the adjustable period begins, a 7/1 ARM can help you save money. With a lower starting rate than a 30-year fixed mortgage, you enjoy reduced monthly payments early on.

Benefits of a 7/1 ARM

Choosing a 7/1 ARM through Community Trust Mortgage offers several advantages:

Lower Initial Payments

Pay less each month during the fixed-rate period, allowing for short-term savings.

Flexibility for Short-Term Goals

Ideal for those who plan to sell or refinance before the rate adjusts.

Potential Interest Savings

With lower initial rates, you could save on interest compared to long-term fixed loans, especially when market rates are favorable.

Many homebuyers find these advantages appealing. However, it’s important to prepare for possible rate adjustments after the fixed period ends.

Understanding Risks and Preparing for Changes

Although the first seven years offer a fixed rate, the adjustable phase may lead to higher payments. If interest rates increase, your monthly costs could rise significantly. That’s why careful financial planning is essential.

At Community Trust Mortgage, we help you anticipate these changes. By reviewing your financial plans, we ensure the loan aligns with your future. If you expect your income to grow or plan to refinance before adjustments begin, a 7/1 ARM could be a great fit.

Is a 7/1 ARM the Right Choice for You?

This loan works well if:

• You plan to move or sell before the adjustable period starts.
• You expect your income to grow, making it easier to handle potential rate changes.
• You want to save on initial payments and invest the difference elsewhere.

Why Choose Community Trust Mortgage?

We offer expert guidance, customized loan options, and a smooth process from application to approval. Our team ensures you understand your mortgage terms so you can make a confident decision. With our support, you can choose a loan that fits your family’s financial future.

Start Your Homeownership Journey Today

Ready to explore your mortgage options? Contact Community Trust Mortgage today. We’ll help you determine if a 7/1 ARM aligns with your goals and create a plan tailored to your needs.