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What is an ARM/Adjustable Rate Mortgage?

April 26, 2017adjustable rate mortgage arm

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What is an ARM/Adjustable Rate Mortgage?

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Adjustable rate mortgages (ARMs) differ from fixed rate mortgages (the more traditional mortgage) in that the rate of the loan changes over the life of the loan. What does this mean to you? That means that the rate of interest you are paying when you start (let’s say 4.25%) doesn’t remain the same for the life of the loan. It could go up (to 4.50%, for example) or down (to 4.00%). That means that your monthly payments may also go up or down.