Adjustable Rate Mortgages

Financing| Fixed Rate Mortgages| Buy Down Mortgage

A variable or adjustable rate loan is a loan whose interest rate, and accordingly monthly payments, fluctuates over the period of the loan. With this type of mortgage, periodic adjustments based on changes in a defined index are made to the interest rate. The index for your particular loan is established at the time of application. There are several different adjustable terms. Most adjustable loans have a predetermined fixed period of time that the rate stays the same, and then the remainder of the time the rate is adjustable, such as a 3/1 ARM. A 3/1 ARM is fixed for a period of 3 years at a set interest rate, and then adjusts the remainder of the life of the loan.