Arm Mortgage

An Adjustable-Rate Mortgage (ARM) is a type of loan whose prevailing interest rate is tied to an economic index (like one-year Treasury Bills), which fluctuates with the market. The three most popular types of ARMs are one-year ARMs, which adjust every year, three-year ARMs, which adjust every three years, and five-year ARMs, which adjust every five years. When the loan adjusts, the lender tacks a margin onto the economic index rate to come up with your loan's new rate. ARMs are considered riskier than fixed-rate mortgages, but their starting interest rates are generally lower than a longer-term rate. Learn more about ARMs and other mortgage options here.

Featured Arm Mortgage Article

ARM Refinance May Be Required To Lock In Mortgage Rate

ARM refinance may be required to lock in your mortgage rate. It depends on the type of ARM (adjustable rate mortgage) you hold. When you refinance an adjustable rate mortgage or ARM, the lender may allow you to lock in your mortgage rate at a certain point in the loan. Other ARM terms may require you to refinance your loan to prevent your mortgage rate from resetting every year, depending on what your mortgage is tied to.

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