Adjustable Rate Mortgages

Get the business property you need with an adjustable rate loan
By Shannon Tani If you need the money to finance your business location, adjustable rate mortgages may be just what you are looking for. They give you the money you need to purchase the property, usually with a low interest rate.
 

After a certain time frame, however, the interest rate on a real estate adjustable rate loan changes, which could dramatically increase your monthly payments. Make sure that you consider this before applying for an adjustable rate house loan or commercial loan.

In order to get an adjustable rate mortgages provider to approve your loan request:

1. Have a sizeable down payment ready. Your down payment should be 5-20% of the value of the property. The more money you are willing to put down on your real estate adjustable rate mortgage, the more likely banks are to approve your request.

2. Have a good credit score and a solid business plan. An ARM mortgages provider will look at these things before they consider giving you a loan. These will also affect the types of rates you can get.

3. Show a positive cash flow. This shows lenders that you are prepared to start making your monthly loan payments immediately.

Compare rates on an adjustable rate house mortgage

Whether you're buying a home, investment property or business location, you want to make sure that you get the best deal possible. Even a small change in interest rate could mean paying a lot of extra money. Compare rates to make sure that you get the lowest available rate.
Try: Bankrate.com is a popular site that allows you to look at the average rates on an adjustable rate home mortgage in your area. The Federal Reserve Board offers a consumer handbook on adjustable rate mortgages to help you learn about them to decide if it's the best choice for you.

Find adjustable rate mortgages from commercial lenders

As a business owner, you may find that it's best to work with lenders that specialize in business clients. These companies will understand the importance of your business and may be able to answer business-related questions.
Try: Apply for an interest-only ARM through Choice Finance. Commercial Direct offers many different mortgage options for business owners.

Contact your bank directly for a real estate ARM loan

Banks also provide adjustable rate mortgages to their business customers. If you already have an account with a bank, it's a good idea to check with them to see what kind of deal they can offer.
Try: Wells Fargo and Chase are excellent choices for your mortgage needs. Contact your account representative to get started on your application.

• Adjustable rate mortgages are not usually the best deal for business owners. You cannot control how high your monthly payments may go. If possible, it's best to get a fixed rate mortgage because your monthly payments stay the same over the life of the loan.