1 Year Mortgage

This type of loan operates as a traditional Adjustable Rate Mortgage. It has an initial interest rate that is usually much lower than 30 Year Interest Rates. This interest rate is 'Fixed' for that first year and, thereafter, will adjust in relation to an Index. These 'adjustments' to the rate come in a few common methods. The first type is for One Year ARM's that adjust only once each year and have the same payment for 12 months before adjusting again. The next type is One Year ARM's that adjust every 6 Months and the payments stay the same for those 6 months until it adjusts again. The last type is for 1 YR Mortgages that adjust every month (after the firs year, of course) and the payments resultantly adjust every month.

These loans are especially beneficial when interest rates are declining because you will not have to refinance in order to receive the benefit of the lower rates because the loan adjusts automatically. It is also a good loan for someone that needs a very low payment to qualify for the loan or needs a low payment only at the beginning of the mortgage loan.

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Return to the mortgage home page. Some settlement companies may charge a large fee up front; or take a monthly Mortgage Net Branch fee from customer bank accounts for their service, possibly reducing the incentive to settle with mortgage net branch creditors quickly.