• Interest Rate and monthly Principal & Interest (Pl) payment remain the same for an initial period of 5, 7 or 10 years, then adjusts annually.

• The interest rate cap limits the maximum amount your rate and monthly P&I payment may increase at each adjustment, and over the life of the loan.

• Typically ARM’s have a lower initial interest rate than fixed rate mortgages.

• Provides flexibility if you expect future income growth, or if you plan to move, or refinance, within a few years.