A loan for a home that has an interest rate that will bounce around. Unlike traditional fixed mortgages, ARMs will reset to “market conditions” (they’ll get better or worse) after a stated period of time, usually three, five, seven or ten years. Think twice about signing up for an ARM just because the initial monthly payments look good. All that can change. A 3/27 mortgage is an ARM that stays fixed for three years, then bounces for the next twenty-seven years. (See also: Mortgage)
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