Q: What are the potential risks of an ARM?
A: The primary risk associated with ARMs is the potential for interest rate increases, which can lead to higher monthly payments. However, it’s important to note that ARMs typically come with limits or caps on how much the interest rate can adjust, both upward and downward, during each adjustment period and over the life of the loan. Additionally, you can choose an ARM with a longer adjustment period, such as 5 or 10 years, to reduce the frequency of potential payment changes.
Q: How can I determine if an ARM is the right choice for me?
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