An "adjustable-rate mortgage" is a loan program with a variable interest rate that can change throughout the life of the loan. It differs from a fixed-rate mortgage, as the rate may move both up or down depending on the direction of the index it is associated with.
For an adjustable-rate mortgage, the index is a benchmark interest rate that reflects general market conditions and the margin is a number set by your lender when you apply for your loan. The index and margin are added together to become your interest rate when your initial rate expires.
Bankrate.com provides FREE adjustable rate mortgage calculators and other ARM loan calculator tools to help consumers learn more about their mortgages.
An adjustable-rate mortgage (arm) has a fixed rate during the early years; afterwards, the rate can change periodically. ARMs could save you money during the early years if the initial rate is lower than that of a fixed- rate mortgage.
Fix the rate and payment on the first 3, 5, 7, or 10 years of your 30-year Adjustable Rate Mortgage.
An adjustable-rate mortgage is a home loan that has an initial period with a fixed interest rate followed by periodic rate adjustments. An adjustable-rate mortgage, or ARM, may sound risky.
What is an Adjustable Rate Mortgage (ARM) Loan? Getting a mortgage can be an intimidating process. Besides the stress of finding that perfect home, there is an abundance of unfamiliar jargon, making it hard for a homebuyer to understand what’s available and decide what to do.
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Calculate which mortgage is right for you. Use this ARM or fixed-rate calculator to determine whether a fixed-rate mortgage or an adjustable rate mortgage, or ARM, will be better for you when.
5 And 1 Arm Arm Mortgages An adjustable-rate mortgage (ARM) is a loan in which the interest rate may change periodically, usually based upon a pre-determined index. The ARM loan may include an initial fixed-rate period that is typically 3 to 10 years.With the 5/1 ARM, any rate improvement would be realized within a year, when the annual adjustment is due. Of course, if the associated index was simply rising over time, it could mean a 1% higher mortgage rate year after year, pushing that 2.5% rate to 5.5% after three years, and even higher after that..
The Prime Rate is the interest rate charged by banks for short-term loans to their most creditworthy customers whose credit standing is so high that little risk to the lender is involved.
Introducing the Adjustable Rate Mortgage (ARM) The best way to talk about an ARM (sometimes referred to as variable rate) is to compare it to the more popular fixed-rate mortgage . The biggest difference between the two is that the interest rate stays the same during the life of a fixed-rate loan.