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Why You Should Consider an Adjustable-Rate Mortgage

Saturday, 26 July 2008

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Why You Should Consider an Adjustable-Rate Mortgage

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Why You Should Consider an Adjustable-Rate Mortgage

With an adjustable-rate mortgage (ARM), the interest rate on the loan is adjusted every 6 months or every 12 months, and as a result, the amount you pay is adjusted too. The lender adjusts the rate by pegging, or tying, the mortgage interest rate to a well-known and respected interest rate index. For example, one such index is the 6-month or 1-year Treasury Bill rate.
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