Read the adjustment structure
The initial fixed period, adjustment frequency, index, margin, and rate caps determine when and how much the rate may change.
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ADJUSTABLE-RATE MORTGAGE
A fixed introductory period followed by possible rate adjustments.
An adjustable-rate mortgage may begin with a fixed rate for a defined period, then adjust according to the loan’s index, margin, and caps.
Model future payments
Compare the initial payment with potential payments after adjustments. Do not assume you will automatically refinance before the first change.
Match the loan to the plan
An ARM may merit consideration for some shorter expected ownership periods, but the future-payment risk must fit your finances.
This page is for general education only. It does not describe every program requirement and is not a loan offer, approval, or commitment to lend. Available programs and terms depend on a complete application and applicable guidelines.