How does an ARM loan work? An adjustable-rate mortgage (ARM) is a home loan with a variable interest rate. With an ARM, the initial interest rate is fixed for a period of time.
What happens when refrigerant enters the evaporator?
How does a thermostat stop a condenser?
What is the purpose of a fan blower?
How does a boat air conditioner work?
How many watts does an air conditioner use?
What does understanding the main components of an air conditioner do?
How does a condenser fan work?
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How do air conditioners work?
An air conditioner provides cold air inside your home or enclosed space by actually removing heat and humidity from the indoor air. It returns the...
What is central air?
In its most basic description, the air conditioning process involves two actions that occur simultaneously, one inside the home and one outside the...
How does central air work?
The thermostat, which is typically mounted on a wall in a central location within the home, monitors and controls the temperature of the indoor air...
What is Central Air?
A typical air conditioning system , often referred to as “central air” or “split-system air conditioning”, normally includes the following:
How does an evaporator coil work?
As the liquid refrigerant inside the evaporator coil converts to gas, heat from the indoor air is absorbed into the refrigerant, thus cooling the air as it passes over the coil. The indoor unit’s blower fan then pumps the chilled air back through the home’s ductwork out into the various living areas.
What happens to refrigerant outside?
Outside the home (sometimes referred to as the “hot side” of the system), the refrigerant gas is compressed before entering a large coil in the outdoor unit. Heat is released outside as the refrigerant turns back to a liquid and a large fan pulls outdoor air through the outdoor coil rejecting the heat absorbed from the house.
What regulates the amount of refrigerant going into the evaporator coil?
an expansion valve the regulates the amount of refrigerant going into the evaporator coil
How does a fan work in a refrigerant coil?
A fan blows indoor air across the cold evaporator coil where the heat inside the home is absorbed into the refrigerant. The cooled air is then circulated throughout the home while the heated evaporated gas is sent back outside to the compressor.
What is an outdoor unit?
an outdoor unit that houses a fan, condenser coil and compressor. an indoor unit (typically either a furnace or fan coil) that houses the evaporator coil and fan to circulate the cooled air. copper tubing that allows refrigerant to flow between the indoor and outdoor units. an expansion valve the regulates the amount of refrigerant going into ...
What is the chemical used in an air conditioner?
A standard air conditioner or cooling system uses a specialized chemical called refrigerant , and has three main mechanical components: a compressor, a condenser coil and an evaporator coil.
Who Should Get An ARM?
I’m a big believer in an adjustable rate mortgage over a 30-year fixed rate mortgage. We are in a permanently lower interest rate environment thanks to technological efficiency, policy efficiency, and greater knowledge of economic cycles.
What is an ARM loan?
The loan usually amortizes over a total of 30 years. ARM stands for Adjustable Rate Mortgage as opposed to a 30-year fixed rate mortgage. Since interest rates have been steadily coming down since the late 1980s, ARMs have become more ...
What is the change in interest rate once the fixed rate period is over?
The change in interest rate once the fixed rate period is over is tied to an index that determines how much your interest rate will rise or fall at each adjustment period. An index is a published interest rate based on the returns of investments such as U.S. Treasury securities. One common index is the LIBOR index.
How long does a 10/1 ARM last?
With a 10/1 ARM, the interest rate does not begin changing based on the index immediately. Instead, the interest rate on a 10 year ARM is fixed for the first 10 years of the loan. After 10 years, the interest rate can change annually for the next 25 years until the loan is paid off. The first number in the name 10/1 ARM indicates the number ...
What is a 30 year fixed mortgage?
Taking out a 30-year fixed mortgage basically costs the average homeowner a lot more money than necessary. You always want to MATCH your fixed rate mortgage portion to the duration you plan to own your home or pay it off.
What does the first number in ARM mean?
The first number in the name 10/1 ARM indicates the number of years of the fixed period while the second number indicates the adjustment interval. An adjustment interval is the period between potential rate changes (in this case, one year).
How much will my principal decrease after 10 years?
After 10 years when it’s time for your ARM to adjust, your principal amount will decline to roughly $360,000. Even if your mortgage rate adjusts to 4 percent from 3.5 percent, you’re still paying roughly the same amount in monthly mortgage payments. Meanwhile, if you had taken out a 30-year fixed loan at 4.5%, you’d be losing compared to ...
What Should I Look For When Shopping For A 5/1 ARM?
When you’re comparing loan options, there are some special numbers to pay attention to when looking specifically at ARMs. For example, you may see one advertised as a 5/1 ARM with 2/2/5 caps. Let’s break down what that means, one number at a time.
Is A 5/1 ARM Loan Right For You?
Assuming market conditions with a decent spread between fixed and adjustable rates, it can make sense to get an adjustable-rate mortgage, particularly if you know you plan to be out of the house by the time the rate would adjust. This is because the upfront interest rates can be lower than anything you would get for a fixed rate under normal circumstances.
What is a 5/1 ARM?
A 5/1 ARM is a mortgage with a fixed rate for the first 5 years of the loan, after which it adjusts up or down once per year based on the movement of a market-driven index, subject to caps on increases. These can be best for people who only plan to be in their property a short time because they’ll move before the rate adjusts. It’s also good if you plan to take the savings on the payment and pay down interest. On the downside, how much you save on the front side is tied heavily to market conditions, so that’s something to be aware of.
Why is an ARM loan lower?
Lower initial interest rate: Because the interest rate can change in the future, an ARM is structured so that you can get a lower interest rate for the first several years of the loan than you would if you were to go with a comparable fixed rate.
How often does an ARM rate go up?
Typically, the adjustment happens once per year.
How long does a 5/1 ARM stay fixed?
Rates may be fixed for 7 or 10 years, ...
What is the initial cap on a mortgage?
Initial cap: The first cap is a limit on the amount the rate can adjust upward the first time the payment adjusts. In this case, regardless of market conditions, the first adjustment can’t be an increase of higher than 2%.
What happens when refrigerant enters the evaporator?
As the refrigerant enters the evaporator, it loses pressure, turns from a liquid to a gas, and becomes much cooler than the air around the coils. This causes the heat to become absorbed from the air, resulting in cooler air that is sent through to the home.
How does a thermostat stop a condenser?
The cold air is then pushed through the vents and out into the various rooms of your home, resulting in a cooler temperature throughout the house. Once the temperature drops below the set temp on the thermostat , the thermostat will stop the system by removing the electrical input to the capacitor and contactor at the condenser.
What is the purpose of a fan blower?
Inside, the fan blower is used to collect the warmer air from the home and blow it over the colder coils of the evaporator.
How does a boat air conditioner work?
Boat air conditioners work a lot like mini-split systems, utilizing a heat pump to reverse flow depending on needs. The air is blown over coils to chill and get released into the cabin, cooling the space.
How many watts does an air conditioner use?
For example, the national average is 13 cents per kilowatt-hour (kWh), a portable air conditioner draws 1500 watts on average, and if you run the system for 8 hours a day, 7 days a week for 3 months, the average will be 672 hours.
What does understanding the main components of an air conditioner do?
Understanding the main components of your air conditioner system will help you in troubleshooting and repairs. Each part has a specific job to do, and if it fails, the result can impact the entire system.
How does a condenser fan work?
As it travels through the condenser coils, the conden ser fan pulls ambient air from around the unit in and over the coils. This causes a heat exchange, which rapidly cools the refrigerant. The heat exchange causes the gas to return to a liquid state as it enters the compressor.
