Ohio adjustable rate mortgage (ARM)
An Ohio adjustable rate mortgage or ARM is a loan with terms that adjust according to a predefined schedule. Initially rates are low making monthly payments low. But once the loan adjusts, monthly payments may get lower, but often they increase, usually substantially. Borrowers need to understand this risk. Many feel the risk is worthwhile, especially if they expect income to increase or to sell the home before the first adjustment period kicks in which for most ARMs is either 1, 3 or 5 years.
