Adjustable Rate Mortgage (ARM)
A mortgage loan in which the interest rate adjusts periodically based upon the movements of a pre-determined index or reference rate, most commonly the LIBOR. There is a set fixed rate period for the loan, and once that period is over the loan can adjust with the changes in the index rate. The borrower may then see periodically changing monthly payments.
ARM loan programs that SunnyHill Financial offers:
10/1 ARM: Rate is fixed for 10 years, then adjusting once per year starting in year 11
7/1 ARM: Rate is fixed for 7 years, then adjusting once per year starting in year 8
5/1 ARM: Rate is fixed for 5 years, then adjusting once per year in year 6