Tip About Adjustable-Rate Mortgages

[Ralph DiBugnara]

The biggest advantage of an adjustable-rate mortgage (ARM) is that it is considerably cheaper than a fixed-rate mortgage, at least for the first three, five, or seven years. ARMs are also attractive because their low initial payments often enable the borrower to qualify for a larger loan and, in a falling-interest-rate environment, allow the borrower to enjoy lower interest rates (and lower payments) without the need to refinance the mortgage.