Adjustable Rate Mortgage (ARM)

An ARM is an adjustable rate mortgage. The interest rate for an ARM varies over time. The initial interest rate is set below the market rate on a comparable fixed-rate loan, and then the rate changes. For example, you can get approved for a 1-year ARM that has a fixed interest rate for a year, then an adjustable rate for the remaining time of the loan.

Here is how you know if this is the right option for you:

You plan to move or refinance in the next few years.

You want to reduce the cost of the loan as much as possible.

You want the lowest rate available.