Q: How is the interest rate calculated on an Adjustable Rate Mortgage (“ARM”) loan?
The calculated interest rate for an ARM loan is based on an index rate plus a margin. The index is a published rate, such as the Prime Rate, Treasury Bill index LIBOR or another index that may have been referenced in your loan documents. Changes in the index rate can cause changes in your loan's interest rate. Please refer to your mortgage documents for details on your loan's margin.
Q: What is the ARM adjustment period?
The period between one rate change and the next is called the adjustment period. Please refer to your mortgage documents for details on your loan's adjustment period.
Q: Can I convert my ARM loan to a fixed interest rate mortgage?
Based on the terms of the note, some ARM loans can be converted to a fixed interest rate loan. Please review your mortgage documents, including the Adjustable Rate Rider, for your specific loan's provisions.
Q: Will I know in advance the amount of my new payment?
Yes, you will be notified in writing at least 30 days in advance of a change in your monthly mortgage payment.