What is an adjustable-rate mortgage?
The Bankrate.com financial term of the day is: "adjustable-rate mortgage."
An adjustable-rate mortgage is also known by the acronym "ARM" -- which is appropriate, because it's a mortgage that can flex. The interest rate changes, or adjusts, periodically in sync with a standard financial index. ARMs can grab you because there's usually an initial period of a certain number of years when your interest rate won't change and will be lower than what you'd get with a comparable fixed-rate mortgage. Most adjustable-rate mortgages also have caps on how much the interest rate may increase when it does eventually start moving.
An adjustable-rate mortgage, or ARM, tempts you with a low interest rate, but watch out because that rate may not last.
To shop for a great mortgage rate, visit the rate tables at Bankrate.com.