Adjustable Rate Mortgage

This is probably the most popular type of adjustable rate financing. This loan allows borrowers who are not sure if they will live in the home for more than 5 years to get the lowest payments available as well as the lowest interest rate. The loan is also used by borrowers who own investment properties and want to maximize the amount they earn on rent. You are also allowed to pay as much principle as you would like to pay down the balance. This is a great alternative to the standard 30 year fixed, because the simple fact is that most homeowners sell or refinance every 3-5 years.