An ARM loan combines the features of a fixed-rate loan with an initial low rate for 1, 3, 5, or 7 years. After the initial rate period, rates adjust annually. Periodic rate caps determine the maximum allowable increase or decrease when the rate changes, and a lifetime cap determines the maximum allowable rate increase over the life of the loan. ARM loans are available for purchase, refinance or construction of 1-4 family housing units with programs available for primary residences, second homes or investor financing.
Adjustable Rate Mortgage. >>