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Mortgage Advice: What is an ARM?
Many of you have never heard of an ARM. Many of you have been told to stay away from adjustable rate mortgages. They definitely have their benefits and they definitely have their downfalls.
For those new to real estate, there are a hundred different terms to learn. It can be overwhelming, but if you take it a term at a time, you'll be just fine.
An adjustable rate mortgage is just that. You will have an interest rate that is adjusted by your lender over the life of the loan, depending on a variety of factors. This means that while you may start out with a low monthly payment of $1,000 it could easily rise by hundreds, or even thousands, of dollars.
What are the benefits of an ARM?
You will generally enjoy a lower initial rate. Additionally, these loans may be available for shorter loan periods. This is especially beneficial to buyers who plan on staying in a home for only a short period of time.
ARMs can also be a good option for those who expect a rise in their salary in the future. If a raise is in your future, you may be able to rest easier knowing ... more

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