Adjustable Rate Mortgages: How They Impact Your Finances
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Understanding Adjustable Mortgage Rates and How They Work An adjustable-rate mortgage (ARM) is different from a fixed-rate mortgage because the interest rate isn't locked in for the entire loan term. With an ARM, your rate is fixed for an initial period—such as three or five years—and then it adjusts periodically after that. For example, if you take out a 5/1 ARM, your rate will remain the same for the first five years, but starting in year 6, it will reset and change each year based on the mark
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