What does Convertible Adjustable-Rate Mortgage mean?

A convertible adjustable-rate mortgage (ARM) is a type of home loan that starts with a fixed interest rate for a certain period of time, and then converts to an adjustable rate. The adjustable rate is based on a financial index, such as the prime rate, and it can change periodically. A convertible ARM can be a good option for borrowers who want the stability of a fixed rate at first, but who also want the potential for lower rates in the future.

Related Terms

Programming Property Tax Active Solar System Proration Federal Style Usury Infill Housing HUD/ Closing statement Cloud on Title Inspection report Cash reserves Graduated-Payment Mortgage (GPM) Co-Housing Environmentally Friendly Home Construction General Plan Money Market Funds Change Frequency Cottage