3/1 Adjustable Rate Mortgage
Current rate: 5.5750%
The interest rate for this loan will stay the same for the first 3 years. The term for this loan is 30 years. The interest rate for the first 3 years is generally less than a 5/1 ARM. At the end of the first 5 years this loan will automatically adjust to an adjustable rate mortgage. Usually the adjustable rate mortgage is a one-year Treasury Arm. The interest rate for this loan will adjust once per year. The first adjustment may be larger than the remaining adjustments. You should check to see if this loan has a cap on the maximum it would adjust at the first adjustment. The loan should also have a cap for the maximum percentage it can adjust during the term of the entire loan. Be sure and calculate your payment based on the total maximum payment your loan could ever reach. That way you will know if you can make the payment without any financial difficulty.