6 Month Adjustable/Interest-only


The 6 month adjustable, interest-only product is interest-only for the first 10 years of the loan and has a fully amortized, principal and interest payment for the remaining 20 years of the loan (it is a 30 year amortized loan). The interest rate will change every six months during the interest-only period, based on an economic index and a margin. The margin is fixed for the life of the loan, however the index will fluctuate and determine if the interest rate will increase or decrease every 6 months. It is good to discuss the index tied to your loan to ensure it is a reliable, stable index. After the first 10 years, a fully amortized principal and interest payment will be effective for the remaining 20 year term as an adjustable rate mortgage. Borrowers can voluntarily make payments toward principal during the interest-only period of the loan.