Mortgage Option ARM's

Adjustable rate mortgages, or ARM's remain a popular option for many home buyers. Unlike a traditional fixed rate mortgage, adjustable rate mortgages have interest rates that fluctuate along with interest rates in general.

The interest rate on an adjustable rate mortgage is generally tied to a specific interest rate, such as the prime rate. The interest rate on an adjustable rate mortgage, also known as a variable rate mortgage, is capped at a specific interest rate. This feature is designed to protect the home buyer in case interest rates spiral out of control.