August 15, 2024 – Mortgage News, Mortgage Rates

With President Biden stepping out of the 2024 presidential race, Vice President Kamala Harris has become the focus of recent news. As Harris gears up for her presidential run, her financial decisions, including her mortgage choices, are being closely examined. One notable detail is her use of a 7-year adjustable-rate mortgage (ARM) with an impressive 2.625% interest rate.

If you’re considering buying a home in St. Louis, understanding the benefits and risks of ARMs can be crucial for making an informed mortgage decision. Here’s what you need to know.

Kamala Harris’s 7-Year Adjustable-Rate Mortgage

Kamala Harris’s current 7-year ARM, taken out in 2020, features a fixed interest rate of 2.625% until 2027. This type of mortgage offers a stable rate for the first 84 months, making it a popular choice for those who want predictable payments without worrying about rate increases for several years.

Harris’s mortgage was acquired through Wells Fargo, a lender with a history of competitive rates despite past controversies. Notably, this isn’t Harris’s first 7-year ARM. She previously secured similar loans in 2012 and 2016, benefiting from favorable rates each time.

Why Consider a 7-Year ARM in St. Louis?

For homebuyers in St. Louis, a 7-year ARM can offer several advantages:

• Lower Initial Rates: ARMs often come with lower initial rates compared to fixed-rate mortgages, which can result in significant savings.
• Payment Stability: The fixed rate for the first seven years provides payment stability, which can help with long-term financial planning.
• Refinancing Opportunities: If rates increase in the future, refinancing before the ARM adjusts can help you secure a new, lower rate and avoid higher payments.

However, current mortgage rates have risen considerably, which may make new ARMs less appealing compared to past years.

Preparing for Future Rate Adjustments

Kamala Harris’s 7-year ARM will adjust in 2027, potentially increasing her rate from 2.625% to around 4.625%, depending on market conditions. This potential increase is a significant factor to consider when choosing an ARM over a fixed-rate mortgage.

For St. Louis homebuyers, it’s essential to:

• Understand Adjustment Risks: After the initial fixed period, ARMs can adjust based on market rates, which could lead to higher payments.
• Consider Refinancing Costs: Refinancing can help manage future rate increases but involves closing costs and a lengthy process. Understanding these factors can help you make an informed decision.

Why Work with a Mortgage Broker?

Navigating the mortgage market can be complex, especially with fluctuating rates and various loan options. At Carlson Mortgage, we specialize in helping St. Louis homebuyers find the right mortgage solution. Whether you’re interested in an ARM or a fixed-rate mortgage, our expertise can guide you through the process and ensure you make the best choice for your financial situation.

Conclusion

Kamala Harris’s choice of a 7-year ARM highlights both the advantages and potential risks associated with adjustable-rate mortgages. For homebuyers in St. Louis, understanding these aspects and working with a knowledgeable mortgage broker like Carlson Mortgage can help you find the ideal mortgage for your new home.

For expert advice and to explore your mortgage options, contact Carlson Mortgage today. Let us help you navigate the mortgage process and secure the best loan for your needs.

Ready to find your dream home? Contact Carlson Mortgage, your trusted St. Louis mortgage broker, for a free consultation. Call or text us at (314) 329-7314 or fill out our loan application at www.carlsonstl.com/apply.