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November 27, 2003 Adjustable-rate mortgages or ARMs differ from fixed-rate mortgages in that the interest rate moves up or down. ARMs usually start lower then fixed-rates, so if you plan to be in your new home for less then five years, an ARM may be better for you. Some ARMs adjust the interest rate every year, while others have an initial fixed rate period of 3,5,7 or even 10 years after which the rate adjusts on an annual basis. But remember, it could go up or down. ARMS can also have caps, or limits on how much your interest rate or payment can increase over the life of the loan or how many of your payments can increase at one time. |
