Introductory Rate ARMs

There are several adjustable rate mortgages that are available to homeowners. These include 6-Month Certificate of Deposit ARM, 6-Month Treasury Average ARM, 12-Month Treasury Average ARM and the 1-Year Treasury Spot ARM. ARMs fluctuates quickly to the market and will allow the borrower to benefit from falling interest rates. Borrowers can take advantage of low rates when rates begin to increase on certain ARM programs that lag in some markets.

Periodic rate caps limits how much your payments can rise at one time.

Payment caps are offered in some ARMs. It limits the payment amount that can rise over the life span of your loan. For example, if the underlying index rises, your payment would increase only to the limit of the payment cap.

Lifetime caps limits the interest rate that can rise during the life of the loan.

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