An adjustable-rate mortgage (ARM) is a loan term option with interest rates that can change periodically after the initial fixed-rate period.After this introductory period, monthly payments are susceptible to increase or decreases based on market fluctuations, which can also affect the monthly payment.
Adjustable-Rate Mortgage Highlights
Am AMR might be right option for you if you plan on moving within 7 years since the feature lower introductory interest rates. If interest rates are expected to fall, a homeowner could potentially reduce their monthly payments with the lowered interest rates. Highlights of an adjustable-rate mortgage include :
- Lower initial monthly payments
- Possibility to qualify for higher loan amounts
- Rates and Payments may decrease based on the index rate