How does paying extra principal on an ARM work?
I currently have a 30 yr fixed at 2.5%. Looking into buying a new primary home. With current rates, I am only thinking of a 5yr or 7yr arm. Never taken an ARM before. On a fixed mortgage, i could pay extra payments (or a one time lump sum payment) and apply it towards principal. This way, even if the monthly payment remains the same, the amount you pay towards principal each month goes up.
Does it work the same for an ARM. Any gotchas with ARMs?