These loans generally begin with an interest rate
that is 2-3 percent below a comparable fixed rate
mortgage, and could allow you to buy more home.
However, the interest rate changes at specified intervals
(for example, every three years) depending on changing
market conditions; if interest rates go up, your
monthly mortgage payment will go up, too. However,
if rates go down, your mortgage payment will drop
also.
There are also mortgages that combine aspects of
fixed and adjustable rate mortgages - starting at
a low fixed-rate for five to seven years, for example,
then adjusting to market conditions. Ask your loan
officer about these and other special types of mortgages
that fit your specific financial situation.
