What is an adjustable-rate mortgage, and is it right for you?

Home loans come in two types: fixed-rate and adjustable-rate mortgages (ARMs). ARMs, which adjust with the market after a fixed-rate period, can be beneficial if you plan to sell your home before the rate increases. However, they carry risks and have rate caps. Understanding the terms and limitations of ARMs is crucial. Refinancing an ARM is possible but risky. Various types of ARM loans exist, including hybrid, interest-only, and payment-option ARMs.