A.R.M. (Adjustable Rate Mortgage) Loans:

The rate and term of most ARM’s are fixed for a specific period and are generally 3, 5, 7, and 10 years and amortized over 30 years. The rate and payment are “fixed” for the initial fixed period and only become adjustable after that period ends. ARM’s typically have lower rates compared to 30 year Fixed rates however, it is best to consult as to whether it makes sense given your potential stay in a home. When the rates do adjust, the rate and payment can increase significantly and should be considered with care.