Adjustable Rate Mortgage (ARM)
Adjustable Rate Mortgage (ARM)
An adjustable rate mortgage (ARM) is a mortgage with interest rate changes that occur during the life of the loan. Payments or rate of interest adjust at specified dates, according to a specified index, and most have interest rate or payment caps. The loan term, however, can be adjusted to reflect changes in interest rate, payment, or loan balance and can never exceed 40 years.
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