ARMs. Interest rates are adjusted periodically at predetermined intervals in accordance with changes that occur in an agreed index. Can have a rate cap from one period to the next and a rate cap through to maturity. Also known as a floating or variable rate mortgage.
(ARM) A mortgage having an interest rate that varies depending on the change in some outside standard such as prime rate, interest rate on United States Treasury securities, or the Inflation rate. The lender can increase or decrease the interest rate on the mortgage at specified intervals based on changing market conditions. The mortgage agreement specifies when the interest rate may change and any limits imposed.
(ARM)- Mortgage that is set with an interest rate that can vary. This is typically done in preset time periods throughout the mortgage.
a home loan in which your rates adjust at
A mortgage that permits the lender to adjust its interest rate periodically on the basis of changes in a specified index.
Adjustable-rate mortgages are popular because they usually start with a lower interest rate, so your monthly payments are lower. This allows you to qualify for a larger mortgage than would be possible with a fixed-rate mortgage. The interest rate on an ARM is adjusted periodically based on an index that reflects changing market interest rates. There are many different types of ARMS. The most common versions we offer are as follows: 10/1 ARM, 7/1 ARM, 5/1 ARM, 3/1 ARM and 1/1 ARM. The first number represents the length of the initial period (how long it is until the first interest rate adjustment). For example, the interest rate on a 10/1 ARM will not change for the first 10 years but can change in the 11th year. People often plan to sell or refinance their home before the end of the initial period.
Is a loan which has a coupon or interest rate that is subject to change on predetermined reset dates. These loans use interest rate indices as the benchmark rate. Adjustable Rate Mortgages come in many variations. Typically, the reset dates recur every 1, 3, or 5 years; but there are other periods used as well. These loans may have cap and floor features which constrain each reset change in interest rates. There may also be lifetime cap and floor features. Adjustable Rate Mortgages may be strictly amortizing though some have negative amortization features.
a mortgage loan in which the interest rate is adjusted periodically, often tied to an index based on changes in market rates. The initial interest rate offered is typically lower than prevailing market rates.
Mortgage loans under which the interest rate is periodically adjusted to more closely coincide with current rates. The amounts and times of adjustment are agreed to at the inception of the loan.
Mortgages with an interest rate that may change up or down depending on an indicator. These are usually based something like the current Treasury bill rate.
ARMS): A type of mortgage loan that usually has a term of 30 years where the interest rate fluctuates and depends on a particular interest rate . The advantage of this type of loan is that lenders typically offer initial discounts (called teaser rates) on the interest rate index making the loans less expensive than a traditional fixed rate mortgage. In addition, the loan payment goes up and down depending on the actual financial conditions of the economy which can be an advantage if interest rates remain constant or decline during the life of the loan. The disadvantage of this type of loan is that your exact payment over time is unpredictable and can increase.
have a low interest rate for the first year or two, after which it is adjusted regularly relative to a specific "index", with payments going up or down accordingly. The most commonly used indexes are rates on certain treasury notes or average regional or national cost of money to savings and loan associations. Some lenders use their own cost of funds, over which - unlike other indexes -they have some control.
ARM, the interest rate may change periodically, usually after a fixed period, 1 year, 3 years, 5 years, 7 years. Lenders charge lower interest rates for mortgage loans in Charles County when the loan is "fixed" for a shorter period than the traditional 30 years mortgage loan. Amortization is still 15 or 30 years, but after the "fixed" period of 1, 3, 5, 7 years, the rate will usually adjust to the then market rate.
