There are various types of ARM loans, with the most common featuring a fixed interest rate for a set period (such as 5, 7, or 10 years), after which the rate adjusts annually based on market conditions. These ARMs are typically labeled as 5/1 ARM, 7/1 ARM, 10/1 ARM, and so on.

A Fixed-Rate Loan features an interest rate that remains constant throughout the loan term, ensuring that your mortgage payments for principal and interest remain unchanged. In contrast, an Adjustable-Rate Mortgage (ARM) usually has a fixed interest rate for an initial period (such as 5, 7, or 10 years) and then adjusts periodically based on market conditions and an index.

A point is a fee paid upfront in exchange for a lower interest rate on a mortgage. It represents a percentage of the loan amount and helps reduce the long-term cost of the loan.

PMI, or Private Mortgage Insurance, is required on conventional loans (fixed or adjustable-rate) when you borrow more than 80% of the appraised value or purchase price of the property, whichever is lower. This insurance safeguards the lender from financial loss in the event of a loan default.

Yes, you can make principal payments at any time during your loan term or pay off the loan in full. Additionally, you can either add a set amount to your monthly payments or make lump-sum payments periodically.