People are asking if home loans in newspaper ads showing astonishingly low rates are for real. These ads are what we call adjustable-rate mortgage payments.

Loans with an adjustable-rate mortgage payment type usually have low rates only for a short time. Rates of adjustable-rate mortgage payment are adjusted on a regular basis, usually after the first year is over.

This means that the interest rate and the amount of the monthly adjustable-rate mortgage payment may vary, going either up or down.

With adjustable-rate mortgage payments, there is little chance of you knowing what your future monthly payment would be. Some types of adjustable-rate mortgage payments have limits to the interest-rate increase. When an adjustable-rate mortgage reaches a certain percentage, the interest rate will no longer increase for the duration of that period. But at the end of that period, the adjustable-rate mortgage payment will vary once more.

Determining whether or not an adjustable-rate mortgage payment is the right type of loan for you usually depends on your financial situation. Also, it depends on the type of adjustable-rate mortgage payment you plan to make. Adjustable-rate mortgage payments have characteristics that might ultimately prove risky in the long run. Because the dynamics of interest rates in the market are never certain, the amount of your adjustable-rate mortgage payments are uncertain as well.

“In show biz you are where you live. Real estate is the key to who has been signed, dumped, divorced, defrocked, deflowered, disbarred, arrested, disgraced, married and multiplied.”
- Pamela Lansden

Adjustable-rate mortgage payments generally have lower initial interest rates compared to fixed-rate mortgages. This makes an adjustable-rate mortgage payment more affordable and easier on the pocket. Adjustable-rate mortgage payments may also help you qualify for a larger loan. This is due to the fact that lenders sometimes decide to extend a loan provided that your current income is steady and your adjustable-rate mortgage payments for the first year are up-to-date.

Another advantage of having an adjustable-rate mortgage payment type of loan is that it could turn out to be less expensive in the long run. With an adjustable-rate mortgage payment, the chance of interest rates going higher is equal to its chance of going lower. Now here in also lies the risk of having an adjustable mortgage payment.

When it comes to having an adjustable mortgage payment, there are no guarantees. It is either the interest rates will lower down or it will rise up. Lower interest rates mean lower monthly adjustable-rate mortgage payments. Higher interest rates mean higher monthly adjustable-rate mortgage payments for you. There is no middle ground. Adjustable-rate mortgage payments are basically a trade-off – you exchange more risk for lower rate with an adjustable-rate mortgage payment.

But despite this, there are some ways to circumvent the risks and increase your chances of landing a good investment in an adjustable-rate mortgage payment. Below are some questions you need to consider:

Is there a possibility that my income will rise up enough to cover higher adjustable-rate mortgage payments should interest rates go up?
Is there a chance that I might take on other sizable debts like a loan for a car or school tuition in the near future?
Will my adjustable-rate mortgage payments increase even though interest rates remain the same?
How long do I plan to own this home? (If you plan on selling soon, an increase in interest rates should not be a problem for your adjustable-rate mortgage payment.)

Additional Resources and Latest News:

Libor: What it means for US consumer loans

You may not think a foreign interest rate could impact the interest you pay in the U.S., but it does. From adjustable-rate mortgages to private student loans, the London Interbank Offered Rate, or Libor, has a direct effect on the amount you pay.

Rate on 30-year mortgage falls to record 3.87 pct.

The average rate on the 30-year fixed mortgage fell this week to a record low, the ninth time that has happened in the last year. Even with the cheapest rates in history, the housing market remains depressed.

30-year mortgage rate falls to record-low 3.87%

WASHINGTON (MarketWatch) -- With economic growth below expectations, mortgage rates hit record lows in the week ending Feb. 2, as the average rate on the 30-year fixed-rate mortgage fell to 3.87% from 3.98% in the prior week, Freddie Mac said Thursday in its weekly report on mortgage rates. The 30-year mortgage data go back to 1971. "Most mortgage rates eased to all-time record lows this week as ...

Rate on 30-year mortgage falls to record low

First Person: I'll Never Accept an Adjustable Rate Mortgage Again

*Note: This was written by a Yahoo! contributor. Do you have a real estate story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.

Mortgage rates for the past 52 weeks, at a glance

The average rate on the 30-year fixed mortgage fell this week to a record low, the ninth time that has happened in the last year, Freddie Mac said Thursday.Here's a look at rates for fixed- and adjustable-rate ...

Freddie Mac Releases 28th Annual ARM Survey Results

MCLEAN, Va. , Jan. 18, 2012 /PRNewswire/ --Â Freddie Mac (OTC: FMCC.OB - News) today released the results of its 28th Annual Adjustable-Rate Mortgage (ARM) Survey of prime loan offerings, which was conducted January ...

30-year mortgage rate drops to record low

WASHINGTON (AP) â€” The average rate on the 30-year fixed mortgage fell this week to a record low, the ninth time that has happened in the last year. Even with the cheapest rates in history, the housing market remains depressed.

HSH.com Weekly Mortgage Rate Radar: Mortgage Rates Retreat Again on Tepid Fed Predictions

HSH.com releases its latest Weekly Mortgage Rate Radar showing a decline in mortgage rates from the previous week. The Weekly Mortgage Rate Radar reports the average rates and points offered by lenders for the two most popular types of mortgages, the conforming 30-year fixed-rate mortgage and the conforming 5/1 adjustable-rate mortgage (ARM). Average rates for both types of loans eased during ...

30-Year Fixed Mortgage Rate Drops 10 Basis Points; Current Rate is 3.72%, According to Zillow Mortgage Rate Ticker

SEATTLE -- The 30-year fixed mortgage rate on Zillow(R) Mortgage Marketplace is currently 3.72 percent, down 10 basis points from 3.82 percent at this same time last week. On Jan. 17, the 30-year fixed ...