Lending Terminology - Community Savings south Florida full service savings and loan serving Palm Beach, Martin, St. Lucie and Indian River Counties. The interest on an ARM may vary up or down at fixed intervals. The changes are tied to a financial index such as one-year Treasury Securities. The ARM often offers a lower beginning interest rate than fixed rate loans.
ARMs are of special interest to buyers who don t plan to own their home for many years.
Also, if current fixed interest rates are high, an ARM may be a good option. The appraiser visits the property and reviews recent selling prices of similar properties in the area. The buyer normally pays the appraisal fee at the time of application or at closing. Caps - The highest interest rate an adjustable loan may be adjusted in any given period. Closing Costs - Expenses that the buyer of a home has to pay at the time of purchase.