There are two main types
of
mortgages: adjustable rate mortgages (ARMs) and fixed rate mortgages.
One type of adjustable rate mortgage is an option ARM. Typically, an
option ARM has a low introductory
interest rate that is fixed for a
short period of time, perhaps one or three months. This means that your
monthly mortgage payments will be fixed for this same one- or
three-month period. Since the interest
rate on an option ARM is
generally much lower than a fixed rate mortgage, the monthly mortgage
payments on option ARMs are usually much lower as well.
