The convertible ARM is an option that is currently very popular. It’s a combination of both fixed-rate and adjustable-rate mortgages, offering the best of both options in one package.
The convertible ARM allows you to convert to a fixed-rate mortgage after a set period of time. For instance, you could get a one-year ARM with the option to convert any time after the first through the fifth adjustment period. This way you can initially benefit from the lower interest rate of a standard ARM, then take advantage of locked-in payments later.
« Back to Glossary Index