Borrowers usually pay slightly below the market average at the beginning of the term, which serves as an incentive to choose the adjustable rate.
In short, and adjustable mortgage results in a higher risk to the borrower, but also an opportunity to take advantage of lower rates in the future. In most cases, buyers are given the opportunity to "lock in" to a fixed rate at some point during the term of the contract.
To find out more about adjustable rate mortgages, and other types of real estate financing, you may wish to try using some mortgage information services.
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