Homeowners can make good use of that extra money

Borrowers who choose adjustable-rate mortgages can save hundreds of dollars a month with lower initial monthly payments. Those funds are often used to purchase furnishings, make home improvements, and for other life expenses. They also can be used to rebuild savings account balances in preparation for potential future rate changes.

• Rate caps limit how much rates may rise in any one year or over the life of the loan. 
• Payment caps limit the dollar amount monthly payments may increase from one adjustment period to another.
• Adjustable-rate loans may be a good choice if you plan to move again before the initial loan rates end or if you expect future increases in household income.
• Borrowers may refinance from an adjustable-rate mortgage to a fixed-rate loan any time they desire.