More homebuyers are turning toadjustable-rate mortgagesas interest rates increase andcompetition to buy a homeremains tight.
And there’s a compelling reason.
We’ll explain what ARMs are and how to decide if this mortgage option is right for you.
What are adjustable-rate mortgages and why are they so popular right now?
But there’s a tradeoff.
ARMs offer a fixed rate for a shorter loan term, such as five, seven or 10 years.
After this introductory period ends, your mortgage rate will adjust with the market and can change over time.
For example, a 5/1 ARM will lock in your rate for five years.
Once the sixth year rolls around, your lender can change your rate once per year.
Who are ARMs best for?
So when is an ARM a smart idea?
