FRM pros and cons: + Peace of mind that your interest rate stays locked in over the life of the loan + Monthly
mortgage payments remain the same - If rates fall, you'll be stuck with your original APR unless you refinance your loan - Fixed rates tend to be higher
than adjustable rates for the convenience of having an APR that won't change ARM pros and cons: + APRs on many ARMs may be lower compared to fixed - rate home loans, at least at
first + A wide variety of adjustable rate loans are available — for instance, a 3/1 ARM has a fixed rate for the
first 36 months, adjustable thereafter; a 5/1 ARM, fixed for 60 months, adjustable afterwards; a 7/1 ARM, fixed for 84 months, adjustable after - While your interest rate could drop depending on interest rate conditions, it could rise, too, making monthly loan payments more
expensive than hoped How is your APR determined?