What are fixed and adjustable rate mortgages?
FIXED RATE MORTGAGES These programs are typically either on a 15 year or 30 year amortization or repayment schedule. These programs provide the most security in the sense that the required monthly principal and interest payments will not change for the life of the loan. This is because the interest rate is fixed for the entire life of the loan, thus it is called a 15 or 30 year fixed program. ADJUSTABLE RATE MORTGAGE All of USA-Mortgage.coms ARM programs are based on a 30 year amortization or repayment schedule. These loans are referred to as adjustable rate mortgages (ARMs), because the interest rate will change or adjust on a predetermined schedule. ARMs have an initial fixed period that the interest rate will not change or adjust. After this initial period the interest rate will change or adjust based on a market index plus a margin. The market index for ARMS may be an average one year treasury bill index as published in the Wall Street Journal or in our Hourly Market Update Section
