MORTGAGES

A fixed-rate mortgage means your mortgage interest rate - and your total monthly payment of principal and interest - will stay the same for the entire term of the loan.

CCB offers a fixed rate on 1-7 year fully amortizing loans.

An ARM is a mortgage with an interest rate that changes, or "adjusts" throughout the loan.

As you decide whether to move ahead with an ARM, you should understand how they work. The interest rate on an ARM has two parts: the index and the margin. An index is a measure of interest rates generally that reflects trends in the overall economy. The margin is an extra percentage that the lender adds to the index.

The initial interest rate and initial principal and interest payment amount on an ARM remain in effect for a limited period. So, when you see ARMs advertised as 5/1 ARMs: the first number tells you the length of time your initial interest rate lasts; the second number tells you how often the rate changes after that. For example, during the first five years in a 5/1 ARM your rate stays the same. After that, the rate may adjust every year until the loan is paid off. This period between rate changes is called the adjustment period. Adjustment periods can vary. CCB offers 3/1, 5/1, and 7/1 ARMs up to 25 years.