What is a 30yr. fixed and what is 7yr ARM
What is a 30yr fix loan and what is 7yr ARm loan?
your question refers to mortgage loan nomenclature, which can be confusing:
a 30-year fixed-rate loan is a loan where the principal is repaid over a 30-year period and the interest rate your lender charges is fixed for the life of the loan.
a 7-year arm (or any arm) is an "adjustable rate mortgage" where the loan's interest rate is fixed for a short period of time (in this case, 7 years) and then readjusts for the remaining term of the loan to an adjustable market rate. if rates go down, you benefit... but if rates go up your rate will increase and your monthly payment could rise.
i hope that his helps you make the right decision for your particular situation. make sure to shop around to find the best loan you can.
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