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( Home mortgages generally last for 15 or thirty years, and payments should be made month-to-month.) While this suggests that your rate of interest can never ever increase, it also suggests that it could be higher on average than a variable-rate mortgage gradually. The rate of interest of an variable-rate mortgage (ARM) will vary, depending upon market trends.
For example, if you have a 7/1 ARM, you get 7 years at the fixed rate after which the rate can be changed as soon as each year. This indicates your month-to-month mortgage payment could increase or down to represent changes to the rate of interest. Every month, the unsettled interest accumulates to your mortgage balance. http://dominickxwsk387.image-perth.org/the-7-minute-rule-for-how-is-freddie-mac-being-hels-responsible-for-underwater-mortgages |
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