An Adjustable-Rate Mortgage (ARM) is a type of home loan with a potential varying monthly payment. The interest rate of the loan may adjust periodically depending on changes in the market associated with the loan. When the rate changes, your monthly payment will adjust accordingly. Generally, if rates go up, your monthly payments will increase and vice versa - if rates fall, your payment will decrease.

An ARM is the solution for you if:

• You plan to live in your home for three to five years.
• You expect an income increase in the near future.

• A lower initial interest rate than most fixed rate loans.
• Lower payments at the beginning of your loan.

With the benefits associated with an ARM, comes the potential risk that increasing interest rates could lead to a higher monthly payment in the future.