Question on mortgage interest rates
Question: I am not sure if it is the right group to ask, but I have a question on mortgage program terminology:
What does “7/1 ARM” actually mean? Are these loans based on 30 years for interest and payment calculations? Does 7 mean at the end of the seven years the loan will be due? What does the “1″ mean?
Thanks,
Answer: 7/1 arm means the rate is fixed for 7 years, then it turns into an adjustable rate mortgage that can adjust every year, with a total term of 30 years. 7 years fixed, then adjustable… If you go that route i would recommend refincing before the 7 years and saving some money.
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