Daytona Beach Real Estate Information: Mortgages
Adjustable-Rate Mortgages (ARMs) (page
1)
With an adjustable-rate mortgage (ARM), the interest rate you pay
is adjusted from time to time to keep it in line with changing market
rates. When interest rates go down, so might your mortgage payments;
but keep in mind that your payments could go up when interest rates
are raised.
ARMs are attractive because they may initially offer a lower interest
rate than fixed-rate mortgages. Since the monthly payments on an ARM
start out lower than those of a fixed-rate mortgage of the same amount,
you can qualify for a larger loan. The chief drawback, of course, is
that your monthly payments may increase when interest rates rise.