Found 1 blog entry tagged as adjustable rate mortgage.

Real Estate Word of the Day: Adjustable-Rate Mortgage

An Adjustable-Rate Mortgage (ARM) is a type of home loan with an interest rate that can change periodically. Unlike fixed-rate mortgages, where the interest rate remains constant throughout the loan term, ARMs have an interest rate that adjusts based on market conditions.

Typically, an ARM starts with a lower interest rate for a set initial period (ranging from a few months to several years), after which the rate can adjust at pre-determined intervals. These adjustments are usually tied to a specific financial index, such as the U.S. Treasury bill rate.

Advantages of ARMs in Real Estate

One of the most attractive features of ARMs is their lower initial interest rates. This can make…

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