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Adjustable Rate Mortgage (ARM)Also known as a variable rate mortgage. The interest rate on these mortgages changes periodically. Variable or adjustable loans are loans whose interest rate fluctuates over the period of the loan. TERMINOLOGY Adjustment
Period : Adjustment
Cap: Lifetime
Cap: Index:
Margin:
Conversion
Options: Computing
the mortgage rate: new rate = index + margin The new rate is also influenced by the adjustment caps and the lifetime caps. Examples: Fully
adjusted rate: 



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Related Mortgage Definitions: Adjustable Rate Mortgage, ARM Adjustable Rate Mortgage (ARM) Also known as a variable rate mortgage. The interest rate on these mortgages changes periodically. Variable or adjustable loans are loans whose interest rate fluctuates over the period of the ... more... Variable Rate Mortgage Variable Rate Mortgage The variable rate mortgage, affectionately know as Adjusatuble rate mortgage or ARM is a mortgage with a rate that will adjust over time. You may be familiar with the term three year ARM, or fiveyear ARM. ... more... Index Index A published interest rate against which lenders measure the difference between the current interest rate on an adjustable rate mortgage and that earned by other investments (such as one three, and fiveyear U.S. Treasury security yields, the monthly average interest rate ... more... Negative Amortization Negative Amortization Negative amortization, also known as Neg Amortization, NegAm, NegAmMort, occurs when borrower pays back less than the full amount of interest owed to the lender each month. The difference betweeen full interest and paid amount is added to the total amount ... more... 