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Ask Shop Rate: Haley - Connecticut

Posted by  on Apr 02, 2010
 
What does "3/1" mean in an ARM mortgage? Simply put the 3 in the 3/1 ARM (Adjustable Rate Mortgage) means that the rate stays fixed for the first 3 years of the life of the loan. During the 4th year and the rate will adjust. To what rate the mortgage will adjust to in the 4th year varies by market conditions, and what the margin and caps are. Be sure to ask your lending institution what the margin, periodic caps, and life cap is on your ARM.

Check out our Mortgage Financing section located in our Learning Center for more information on Adjustable Rate Mortgages.


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