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Sunday, April 16, 2006

Delayed adjustable rate mortgage

A loan that first has a fixed interest rate followed by a fluctuating rate

Delayed adjustable rate mortgages (Delayed ARMs) have a fixed initial interest rate, then adjust, usually annually, for the life of the loan.

A 5/1 ARM is an example of a delayed ARM, since the interest rate stays the same for the first 5 years and then changes on the sixth year and every year after that.

A delayed ARM gives you the opportunity to enjoy fixed monthly payments for a longer period of time. Often people opt for this type of loan because they plan to sell their homes before the ARM starts to fluctuate. Delayed ARMs are also called intermediate ARMs
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