Adjustable Rate Mortgages
By: Jeremy Maddock | Posted: 14th November 2005
An adjustable mortgage is an arrangement where a homebuyer takes out a loan with a variable or "floating" interest rate. This means that the interest rate paid will move up and down according to current conditions in the real estate market.
Borrowers usually pay slightly below the market average at the beginning of the term, which serves as an incentive to choose the adjustable rate.
In short, and adjustable mortgage results in a higher risk to the borrower, but also an opportunity to take advantage of lower rates in the future. In most cases, buyers are given the opportunity to "lock in" to a fixed rate at some point during the term of the contract.
To find out more about adjustable rate mortgages, and other types of real estate financing, you may wish to try using some mortgage information services.
About the Author: Jeremy Maddock is the webmaster of FinanceFacts.info, a useful source of finance articles.
About the Author
Occupation: Webmaster
Jeremy Maddock is a freelance writer, webmaster, and internet entrepreneur from Victoria, BC.
This article is free for republishing
Printed From: http://www.articlealley.com/article_15533_33.html
Back to the original article
Tags: risk, borrowers, interest rate, fixed rate, adjustable rate mortgages, homebuyer, real estate market, real estate financing, maddock, current conditions, adjustable mortgage