Get the Facts about ARMs Loans
An adjustable-rate mortgage (ARM) is a mortgage option in which the interest rate varies throughout the life of the loan. Sometimes called variable-rate or floating mortgages, ARM's interest rate reset is based on an index, plus an additional spread named the ARM margin.
An ARM can be a smart financial move if you're planning to keep the loan for a limited time, plus be able to handle possible rate increases. In many cases, ARMs have rate caps that limit how much the rate can increase at a given time or in total.