Adjustable rate mortgages (ARMs) - Mortgage loans under which the interest rate is periodically adjusted to more closely coincide with current rates. The amounts and times of adjustment are agreed to at the inception of the loan. These loans are also called: adjustable rate loans, flexible rate loans, variable rate loans.

Following is a brief description of some of the most common ARMs:

1-Year Adjustable Rate Mortgage (ARM)

A 1 year ARM has payments that adjust once each year and the payments are calculated over a 30-year period. Typically, this type of loan has the lowest initial start rate and can therefore help you qualify for a larger loan amount. If you have limited funds for a downpayment ask your Oxford Wellington mortgage specialist about 1-year ARM.

3/1 ARM

This loan type has fixed payments for the first 3 years and then turns into a 1-year ARM, adjusting every year thereafter. The loan payments are calculated over a period of 30 years.

5/1 ARM

This loan has fixed payments for 5 years and then turns into a 1-year ARM, adjusting every year thereafter. The loan payments are calculated over a period of 30 years.

7/1 ARM

This loan has fixed payments for 7 years and then turns into a 1-year ARM, adjusting every year thereafter. The loan payments are calculated over a period of 30 years.

10/1 ARM

This loan has fixed payments for 10 years and then turns into a 1-year ARM, adjusting every year thereafter. The loan payments are calculated over a period of 30 years.