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Adjustable-Rate Mortgage Loans (ARMs)

The Fauquier Bank offers Adjustable-Rate Mortgage (ARM) loans to Northern Virginia homebuyers in Fauquier and Prince William Counties. Since 1902, we’ve earned generations of customer loyalty for our personalized service and local expertise. 

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What is an adjustable-rate mortgage?

An ARM is a type of home loan with an interest rate that will adjust up or down annually once the fixed-rate introductory period is over. Annual adjustments are based on the rate your loan is indexed to. Adjustable-rate loans are also available through federal home buying programs such as FHA loans

ARM Mortgage Benefits

  • Low Introductory Rate: The introductory fixed rate on an ARM loan will usually be lower than the annual percentage on a fixed-rate mortgage. 
  • Build equity faster: While you have a lower interest rate, you can pay a little extra on your mortgage each month to build equity faster. 
  • Potential downward adjustment: If the index rate goes down, so will the rate on your loan.

When to Choose an ARM Loan

Our Mortgage Loan Originators can help you find the best mortgage loan option to match your needs and budget. If an ARM loan’s up-front savings on interest appeals to you, this type of mortgage is available as a conventional loan as well as a government-insured mortgage such as a VA, FHA, or USDA loan

Fixed-Rate Mortgages are the primary alternative to ARM loans. The interest rate may be higher on a fixed-rate loan, but it also remains stable throughout the life of the loan, offering predictability that you can’t get with an ARM. 

Your choice may come down to how long you envision living in the home. If this is a “starter house,” you may be better off with an ARM since you plan to sell around the time the introductory period ends anyway. On the other hand, if you see yourself staying long-term, even past when your mortgage is paid off, the stability of a fixed-rate loan may be a better option.

Do more with The Fauquier Bank!

We are a proudly independent community bank with nine branch locations in Northern Virginia: Manassas, Haymarket, Bristow, Gainesville, Warrenton, The Plains, New Baltimore, Catlett, and Bealeton. As one of the only community banks serving Prince William and Fauquier counties, we reinvest our profits back into the local towns we serve. TFB mortgage customers can expect a personalized experience from beginning to end, as our friendly and knowledgeable Mortgage Loan Originators guide you through the application and closing process. To speak with a local mortgage lender, give us a call, chat with us or apply online, or visit your nearest TFB office.

Fixed-Rate Mortgage FAQs

  • How does a 10-year Adjustable-Rate Mortgage work?
    A 10-year ARM loan has a fixed introductory rate for the first 10 years of the loan. After that, the rate will adjust up or down annually for the rest of the loan term.
  • What are Adjustable-Rate Mortgages tied to?
    The annual adjustment on an ARM loan depends on the index plus a margin. The margin is set at the beginning and stays the same throughout the loan. The index is tied to a specific figure such as the maturity yield on one-year Treasury bills, the 11th District cost of funds index, or the London Interbank Offered Rate.
  • Can you pay off a 5/1 ARM early?
    The short answer is yes, but it requires more calculation than with a fixed-rate mortgage. To pay off an ARM loan early, you’ll need to increase your extra payment every time the rate adjusts.

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