| Discretionary ARM |
An adjustable rate mortgage on which the lender has the right to change the interest rate at any time subject only to advance notice. Discretionary ARMs are found abroad, not in the United States. Discretionary ARMs may also have no caps whatsoever, compared to U.S. ARMs which have lifetime or periodic adjustments in order to protect borrowers. Bankapedia's TakeThe world has maligned the U.S. for the loose lending practices that led up to the sub-prime meltdown, but at least we managed to keep the beast that is the discretionary ARM out. A short list of Countries in which discretionary ARMS are allowed: United Kingdom Australia South Africa India
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