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Thank you for visiting today. If this is your first visit, take your time and look around. We have plenty of information and resources available to you. If you are a return visitor, thank you. We would love to hear from you and tell you how we can serve all your real estate needs. Call Concept Real Estate today at
(618) 281-7100

If you need direct contact for any of our agents here is their contact info.

Deb Campbell
(314) 956-0080
dcampbell@conceptrealtors.com

Angie Causey
(618) 781-9092
angie@conceptrealtors.com

Gregg Crawford
(618) 977-5318
gcrawford@conceptrealtors.com 

Jane Crawford
(618) 977-7065
jcrawford@conceptrealtors.com

Rob Davis
(618) 558-5710
rdavis@conceptrealtors.com

Nick Gibson
(314) 666-4318
ngibson@conceptrealtors.com

Tari Jacobs
(618) 974-8899
tjacobs@conceptrealtors.com

Kelly Rompel
(618) 334-1214
krompel@conceptrealtors.com

Stephen Rothermich
(636) 734-3774
srothermich@conceptrealtors.com

Kathy Sainz
(314) 605-0755
ksainz@conceptrealtors.com

Blake Salger
(618) 791-0210
bsalger@conceptrealtors.com

Katie Stumpf
(618) 504-0788
kstumpf@conceptrealtors.com

Inger Varel
(618) 920-7799
ivarel@conceptrealtors.com

Jim VonDerHaar
(314) 494-8874 
jimv@conceptrealtors.com

You can always call our office and we will get a message to any of our agents (618) 281-7100.

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Adjustable Rate Mortgages - The PROS & CONS

Now that you know what an ARM is and how it works, you may be wondering what the advantages and disadvantages are. So let’s explore that issue.

Offering adjustable rates allows lenders to transfer part of the interest rate risk from themselves to the borrower. If you get a fixed rate mortgage and the interest rate then goes up, it costs the lender money. However, if you have an adjustable rate mortgage, as the interest rate goes up, so does your payment, thus compensating the lender. Adjustable rate mortgages are particularly useful when unpredictable interest rates make fixed rate loans hard to get.

One of the main advantages of an adjustable rate mortgage is that the initial interest rate is lower than that of a fixed rate mortgage. A lower rate means lower payments, which may help you qualify for a larger loan. This is an important detail if you expect your future earnings to rise. In this case, the ARM will allow you to qualify for a larger loan amount earlier rather than later.

However, this information should only be used with care. If you use an ARM to qualify for a larger loan amount than a fixed rate would allow you and the interest rate then rises drastically or your income doesn’t rise, you may not be able to afford the larger monthly payments, thus causing you to default on your loan.

A situation in which an adjustable rate mortgage makes sense would be if you are only going to keep the house for a short period of time. If you are only planning to own your house for only a few years, the risk of the interest rate rising goes down. This means that you will get a better rate with an ARM, making it a good choice. However, if you plan on staying in your home for a long period of time, a fixed rate may be a better option.

The lesson here is to have a plan. Know what your goals are in purchasing a home and plan for all eventualities. Do your research when shopping for an ARM and consider the worst-case scenario.

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agent photo


Jane Crawford, SFR
Managing Broker
111 N. Main St.
Columbia, IL 62236
Phone: 618-281-7100

jcrawford@conceptrealtors.com

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Thanks for all your help in making our "dream home" a reality. We really appreciated that you went the extra mile to get us the best price for our home. You are truly a professional. John and Mary Blosum
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