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Adjustable rate
mortgage (ARM)
A
mortgage with an interest rate that fluctuates with the going
interest rate and is based upon a known standard, such as a
T-bill. The best time to use an ARM is when interest
rates are high (above 7 to 8 percent) and it appears interest
rates will decline over the next year. Usually, unless
interest rates are high it is better to get a fixed rate
mortgage because with an ARM, your mortgage payment can
fluctuate from year to year.
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