3 Year ARM Rate Mortgage
A 3 year ARM rate is an adjustable rate mortgage that's fixed for 3 years and then adjustable each year after that. You will start out with a fixed rate that the bank gives you and stick with that rate for the first 3 years of the mortgage. After the 3 years are up your interest rate will adjust to what the current rates are. Then it will change at the end of each subsequent year to follow.
This is one of my favorite ARM rate options because it give you some time to adjust to the interest rates and see what happens to them over the next few years.
Use a calculator to help you with the interest rate changes. Assume that your rate will go up the maximum of 2% after those 3 years and see what your new mortgage payment will be with the interest calculator. You might be very surprised.
The fixed rates aren't much higher right now so opting into a fixed rate mortgage is probably the best idea. The reason to get an adjustable rate in the first place is because of the lower initial interest rate. Well if they aren't much lower then what's the point?
The second reason to get any type of adjustable rate would be in hope that interest rates lower for yours to also lower. Well the current interest rates are at about 5% and some even lower than that. So how much can they really lower before they start to increase again? Also, if the do increase, what will you do then? You might be stuck with that 2% increase that you figured out on your mortgage calculator.
Make sure you pay attention to the interest rates and refinance to a fixed rate it they start going up during those few years. | 
