Mortgage Dictionary
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10/1 Mortgage
The 10/1 mortgage is a
two-step mortgage
with a twist. You begin with a fixed
rate for 10 years. Then, the loan changes to a 1-year
adjustable-rate mortgage (ARM).
The advantage of
this option is that the initial interest rate is lower than the interest rate
available on a traditional 30-year
fixed-rate mortgage.
So, if you plan to
sell your home within 10 years, it may make sense to consider this option.