National Mortgage Alliance cuts 7-year ARM

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National Mortgage Alliance is offering one of the best nationally available deals on seven-year, adjustable-rate mortgages.

As of July 7, the Atlanta-based online lender and division of Georgia Banking Co. is charging just 3.75%, with $1,450 in fees and no points.

The offer is available in all 50 states, and the principal and interest payments for the first seven years would be $463 a month for every $100,000 you borrow.

Some lenders offer ARMs with lower rates. But check their interest rate caps before you sign up.

The rates on some bargain-basement loans can go up as much as five percentage points when they reset for the first time.

National Mortgage Alliance won't do that.

Its interest rate caps are 2/2/6, which means it can't go up more than two percentage points the first time it adjusts in seven years, or two percentage points each year after, and it can never go up more than six percentage points altogether.

Of course, this kind of loan makes the most sense if you plan to sell the home before the mortgage resets. A seven-year ARM like this one gives you more time than adjustable-rate mortgages that reset more quickly.

But just in case you don't sell before then introductory rate expires, you need an ARM you can still afford even if the payments go up.

Interest rates are at historic lows, and you have to assume they'll be higher a few years from now.

To qualify for this loan, you need a credit score of 720 or higher. You must also be applying for a conforming loan -- one for less than $417,000 to $729,500, depending on where you live.

Click here to compare this deal with the best mortgage rates from scores of other lenders in your area.

Or use our mortgage calculator to see how much the monthly payments would be for any home loan.

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