Final answer:
An adjustable-rate mortgage (ARM) is a type of loan that permits borrowing additional funds at a later date. The interest rate varies with market interest rates.
Step-by-step explanation:
"ARMs" typically refers to "Adjustable Rate Mortgages." An Adjustable Rate Mortgage is a type of home loan in which the interest rate can change periodically over the life of the loan. The interest rate is often tied to an underlying financial index, such as the U.S. Treasury Bill rate or the London Interbank Offered Rate (LIBOR). The interest rate may adjust at specified intervals, and the adjustments are typically subject to caps and limits to protect borrowers from significant rate increases.
An adjustable-rate mortgage (ARM) is a type of loan that permits borrowing additional funds at a later date. With an ARM, the interest rate varies with market interest rates, providing borrowers with the opportunity to take advantage of lower interest rates.