Adjustable Rate Mortgages (ARMs)
If you plan to be in your home for a relatively short period of time, an ARM might be a good choice. Your interest rate is fixed for an initial period before switching to an adjustable rate. For example, a 7/1 ARM would have a fixed rate for the first seven years, then switch to an adjustable rate which can change annually for the remaining loan term. ARMs have 30-year terms with 5/1, 7/1 and 10/1 options.