In addition to a variety of interest rate indices, ARMs offer various rate adjustment and payment options. Examining your financial situation and available loan rate and payment options will guide you to your best choice. Some loan programs adjust rates annually or semi-annually and some adjust monthly. Some monthly adjusting home loans offer multiple payment options that give you additional control over your personal finances. Borrowers with varying monthly income or expenses might appreciate making lower minimum payments during leaner months and higher payments in others.
ARMs offer flexibility to accommodate changing financial situations.
Learning what is available can save you money. For borrowers who plan to stay in their homes for a long period of time, many experts recommend a fixed rate mortgage. While FRMs generally cost more up front, payments never change. For those with stable incomes and expenses, it's an easy choice. After several years, the monthly payments for an FRM could be less than the monthly payments for an ARM loan counterpart, if interest rates rise considerably.