With an adjustable-rate mortgage (ARM), your interest rate changes over the life of the loan according to the terms specified in advance. With ARMs:

- The initial interest rate is usually lower than a fixed-rate mortgage

- The monthly payment is usually lower

- The interest rate may be adjusted (up or down) at predetermined intervals, at which time the monthly payments will increase or decrease

- The monthly payment will then increase or decrease

- "Rate cap" protection is usually offered, which limits the amount the rate can be increased, both per year and over the life of the loan

- All ARMs are amortized over 30 years

Advantages: ARMs are usually priced lower than fixed-rate mortgages so you can increase your buying power and lower your initial monthly payments. If interest rates go down, you'll enjoy lower payments.

Get preapproved online or call an experienced Harvard Financial representative at 1-978-772-5500.