Adjustable Rate Mortgage (ARM)

An ARM home loan has an interest rate that may vary over the term of the loan.  ARM stands for “Adjustable Rate Mortgage.”  Homeowners with ARMs are protected by a ceiling, or maximum interest rate.  ARMs typically begin with more attractive rates than fixed rate mortgages.  The most popular arm home loans are 5 year arms, 3 yr arms, 7 year arms, and 10yr arms.  An ARM often works well for people who would like to enjoy the low initial rate and who may be refinancing or moving within 5-7 years. Also, ARM loans are utilized normally when fixed rates are high or for jumbo loans.