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ARM PROGRAM DISCLOSURE

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*3270028395*
*MCARMDISC*
Mortgage Cadence Document Center FenId: 10134 © 1536 02/20
Page 1 of 2
Loan Number: 3270028395
Date: June 16, 2020
ARM PROGRAM DISCLOSURE
This disclosure describes the features of the adjustable-rate mortgage (ARM) program you are considering. Information
on other ARM programs is available upon request.
HOW YOUR INTEREST RATE AND PAYMENTS ARE DETERMINED
Your interest rate will be based on an index plus a margin.
Your payment will be based on the interest rate, loan balance, and loan term. The interest rate will be based on the
following index, plus our margin of 2.750%:
The weekly average yield on United States Treasury securities adjusted to a constant maturity of one year, as
made available by the Board of Governors of the Federal Reserve System through the Federal Reserve Bank
of St. Louis (FRED).
Ask us for our current interest rate and margin. Information about the index rate can be found at:
Index values are published by the Federal Reserve Bank of St. Louis, located on the web at
https://fred.stlouisfed.org/release/tables?rid=18&eid=290.
[X] If this box is checked, your initial interest rate is not based on the index used to make later adjustments. Ask us for the
current amount of our adjustable rate mortgage discounts or premiums.
HOW YOUR INTEREST RATE CAN CHANGE
Your interest rate will not change for the first 60 month(s) of your loan. After the first 60 month(s) of your loan the
adjustable interest rate you will pay may change; it may then change every 12 month(s) thereafter. Each date on which
your interest rate can change is called a "Change Date" and will be described in your loan documents.
Beginning with the first Change Date, your adjustable interest rate will be based on an Index that is calculated and
provided to the general public by an administrator (the "Administrator"). As described above, the index is the weekly
average yield on United States Treasury securities adjusted to a constant maturity of one year, as made available by the
Board of Governors of the Federal Reserve System (the "Index"). Before each Change Date your new interest rate will be
calculated by adding a margin to the current value of the index. The margin may change if the Index is replaced in
accordance with the terms of the promissory note for this adjustable rate mortgage. This value is then rounded [ ] up [ ]
down [X] up or down to the nearest 0.125%. Subject to the limits described below, this rounded amount will be your new
interest rate until the next Change Date.
Your loan has a maximum and minimum interest rate. These maximum and minimum rates are determined by the initial
interest rate, the lifetime cap(s) and perhaps a ceiling and floor independent of those variables. For example, the floor
rate may be different than the starting interest rate minus the lifetime cap(s).
On the first Change Date, your interest rate cannot increase or decrease more than 2.000%. Based on an initial interest
rate of 3.125%, on the first Change Date your interest rate will not be greater than 5.125% or less than 2.750%.
Thereafter, your adjustable interest rate will never be increased or decreased on any single Change Date by more than
2.000%. Over the term of the loan, your interest rate cannot increase or decrease more than 5.000%. Based on an initial
interest rate of 3.125%, your interest rate will never be greater than 8.125% or less than the margin of 2.750%.
HOW YOUR PAYMENT CAN CHANGE
Following the initial 60 months of your loan, your monthly payment can increase or decrease substantially, it may then
change every 12 months based on changes in the interest rate. Your new payment will be due beginning with the first
payment due date after the Change Date on which the related interest rate change occurred, and will be your payment
until the first payment due date after the next Change Date.
*3270028395*
*MCARMDISC*
Mortgage Cadence Document Center FenId: 10134 © 1536 02/20
Page 2 of 2
FOR EXAMPLE, on a $10,000, 30-year term loan with an initial interest rate of 3.125% (based on the 0.186% index value
rate in effect on June 2020, plus a margin of 2.750% plus a premium of 0.189%, rounded as provided above), the
maximum amount that the interest rate can rise is 5.000% to 8.125% and the monthly payment can rise from a first year
payment of $42.84 to a maximum of $68.83 in the 8th year. To see what your monthly payments would be, divide your
mortgage amount by $10,000; Then multiply the monthly payment by the resulting amount.
(FOR EXAMPLE, the initial monthly payment for a mortgage amount of $60,000 would be calculated as follows: $60,000
divided by $10,000 = 6; 6 times $42.84 = $257.04 per month. The maximum monthly payment would be calculated at 6
times $68.83, or $412.98 per month.)
You will be notified at least 210, but no more than 240, days before the first payment at the adjusted level is due after the
initial interest rate adjustment of the loan. This notice will contain information about the adjustment, including the interest
rate, payment amount, and loan balance.
You will be notified at least 60, but no more than 120, days before the first payment at the adjusted level is due after any
interest rate adjustment resulting in a corresponding payment change. This notice will contain information about the
adjustment, including the interest rate, payment amount, and loan balance.
OTHER INFORMATION
This obligation [ ] does [X] does not have a demand feature.
I/We have read this disclosure form, and understand its contents, as evidenced by my/our signature(s) below. I/We have
received a copy of the Consumer Handbook on Adjustable Rate Mortgages (CHARM booklet). THIS IS NEITHER A
CONTRACT NOR A COMMITMENT TO LEND.
Xborr1_esignX2
Borrower - John Homeowner
Date
*3270028395*
*MCARMDISC*
Mortgage Cadence Document Center FenId: 10134 © 1536 02/20
Page 1 of 2
Loan Number: 3270028395
Date: June 16, 2020
ARM PROGRAM DISCLOSURE
This disclosure describes the features of the adjustable-rate mortgage (ARM) program you are considering. Information
on other ARM programs is available upon request.
HOW YOUR INTEREST RATE AND PAYMENTS ARE DETERMINED
Your interest rate will be based on an index plus a margin.
Your payment will be based on the interest rate, loan balance, and loan term. The interest rate will be based on the
following index, plus our margin of 2.750%:
The weekly average yield on United States Treasury securities adjusted to a constant maturity of one year, as
made available by the Board of Governors of the Federal Reserve System through the Federal Reserve Bank
of St. Louis (FRED).
Ask us for our current interest rate and margin. Information about the index rate can be found at:
Index values are published by the Federal Reserve Bank of St. Louis, located on the web at
https://fred.stlouisfed.org/release/tables?rid=18&eid=290.
[X] If this box is checked, your initial interest rate is not based on the index used to make later adjustments. Ask us for the
current amount of our adjustable rate mortgage discounts or premiums.
HOW YOUR INTEREST RATE CAN CHANGE
Your interest rate will not change for the first 60 month(s) of your loan. After the first 60 month(s) of your loan the
adjustable interest rate you will pay may change; it may then change every 12 month(s) thereafter. Each date on which
your interest rate can change is called a "Change Date" and will be described in your loan documents.
Beginning with the first Change Date, your adjustable interest rate will be based on an Index that is calculated and
provided to the general public by an administrator (the "Administrator"). As described above, the index is the weekly
average yield on United States Treasury securities adjusted to a constant maturity of one year, as made available by the
Board of Governors of the Federal Reserve System (the "Index"). Before each Change Date your new interest rate will be
calculated by adding a margin to the current value of the index. The margin may change if the Index is replaced in
accordance with the terms of the promissory note for this adjustable rate mortgage. This value is then rounded [ ] up [ ]
down [X] up or down to the nearest 0.125%. Subject to the limits described below, this rounded amount will be your new
interest rate until the next Change Date.
Your loan has a maximum and minimum interest rate. These maximum and minimum rates are determined by the initial
interest rate, the lifetime cap(s) and perhaps a ceiling and floor independent of those variables. For example, the floor
rate may be different than the starting interest rate minus the lifetime cap(s).
On the first Change Date, your interest rate cannot increase or decrease more than 2.000%. Based on an initial interest
rate of 3.125%, on the first Change Date your interest rate will not be greater than 5.125% or less than 2.750%.
Thereafter, your adjustable interest rate will never be increased or decreased on any single Change Date by more than
2.000%. Over the term of the loan, your interest rate cannot increase or decrease more than 5.000%. Based on an initial
interest rate of 3.125%, your interest rate will never be greater than 8.125% or less than the margin of 2.750%.
HOW YOUR PAYMENT CAN CHANGE
Following the initial 60 months of your loan, your monthly payment can increase or decrease substantially, it may then
change every 12 months based on changes in the interest rate. Your new payment will be due beginning with the first
payment due date after the Change Date on which the related interest rate change occurred, and will be your payment
until the first payment due date after the next Change Date.
*3270028395*
*MCARMDISC*
Mortgage Cadence Document Center FenId: 10134 © 1536 02/20
Page 2 of 2
FOR EXAMPLE, on a $10,000, 30-year term loan with an initial interest rate of 3.125% (based on the 0.186% index value
rate in effect on June 2020, plus a margin of 2.750% plus a premium of 0.189%, rounded as provided above), the
maximum amount that the interest rate can rise is 5.000% to 8.125% and the monthly payment can rise from a first year
payment of $42.84 to a maximum of $68.83 in the 8th year. To see what your monthly payments would be, divide your
mortgage amount by $10,000; Then multiply the monthly payment by the resulting amount.
(FOR EXAMPLE, the initial monthly payment for a mortgage amount of $60,000 would be calculated as follows: $60,000
divided by $10,000 = 6; 6 times $42.84 = $257.04 per month. The maximum monthly payment would be calculated at 6
times $68.83, or $412.98 per month.)
You will be notified at least 210, but no more than 240, days before the first payment at the adjusted level is due after the
initial interest rate adjustment of the loan. This notice will contain information about the adjustment, including the interest
rate, payment amount, and loan balance.
You will be notified at least 60, but no more than 120, days before the first payment at the adjusted level is due after any
interest rate adjustment resulting in a corresponding payment change. This notice will contain information about the
adjustment, including the interest rate, payment amount, and loan balance.
OTHER INFORMATION
This obligation [ ] does [X] does not have a demand feature.
I/We have read this disclosure form, and understand its contents, as evidenced by my/our signature(s) below. I/We have
received a copy of the Consumer Handbook on Adjustable Rate Mortgages (CHARM booklet). THIS IS NEITHER A
CONTRACT NOR A COMMITMENT TO LEND.
Xborr1_esignX2
Borrower - John Homeowner
Date
*MCCHRMBOOK*
Mortgage Cadence Document Center FenId: 17495 © 1625 6/20
Consumer Financial
Protection Bureau
An official publication of the U.S. government
*MCCHRMBOOK*
Mortgage Cadence Document Center FenId: 17495 © 1625 6/20
How to use the booklet
When you and your mortgage lender discuss
adjustable-rate mortgages (ARMs), you
receive a copy of this booklet. When you
apply for an ARM loan, you receive a Loan
Estimate. You can request and receive
multiple Loan Estimates from competing
lenders to find your best deal.
You may want to have your Loan Estimate
handy for any loan you are considering as
you work through this booklet. We reference
a sample Loan Estimate throughout the
booklet to help you apply the information to
your situation.
You can find more information about ARMs
at cfpb.gov/about-arms. You’ll also find
other mortgage-related CFPB resources,
facts, and tools to help you take control of
the homebuying process.
About the CFPB
The Consumer Financial Protection Bureau
regulates the offering and provision of
consumer financial products and services
under the federal consumer financial laws
and educates and empowers consumers to
make better informed financial decisions.
This booklet, titled Consumer Handbook on
Adjustable Rate Mortgages, was created to
comply with federal law pursuant to 12
U.S.C. 2604 and 12 CFR 1026.19(b)(1).
How can this booklet help you?
This booklet can help you decide whether an
adjustable-rate mortgage (ARM) is the right
choice for you and to help you take control of
the homebuying process.
Your lender may have already provided you
with a copy of Your Home Loan Toolkit. You
can also download the Toolkit from the
CFPB’s Buying a House guide at
cfpb.gov/buy-ahouse/.
An ARM is a mortgage with an
interest rate that changes, or
“adjusts,” throughout the loan.
With an ARM, the interest rate and
monthly payment may start out low.
However, both the rate and the
payment can increase very quickly.
Consider an ARM only if you can
afford increases in your monthly
payment— even to the maximum
amount.
After you finish this booklet:
• You’ll understand how an ARM works and
whether it’s the right choice for you. (page
2)
• You’ll know how to review important
documents when you apply for an ARM.
(page 6)
• You’ll understand the risks that come with
different types of ARMs. (page 18)
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Is an ARM right for you?
TIP
ARMs come with the risk of higher payments in
the future that you might not be able to predict.
But in some situations, an ARM might make
sense for you. If you are considering an ARM,
be sure to understand the tradeoffs.
Don’t count on being able to refinance before
your interest rate and monthly payments
increase. You might not qualify for refinancing if
the value of your home goes down or if
something unexpected damages your financial
situation, like a job loss or medical costs.
COMPARE
FIXED - RATE MORTGAGE
ADJUSTABLE - RATE MORTGAGE
Consider
this option if
• You prefer predictable payments,
or
• You plan to keep your home for a
long period of time
• You are confident you can afford
increases in your monthly payment—
even to the maximum amount, or
• You plan to sell your home within a short
period of time
Interest rate
• Set when you take out the loan
• Stays the same for the entire loan
term
• Based on an index that changes
• May start out lower than a fixed rate
mortgage but you bear the risk of
increases throughout your loan
Monthly
payment
• Principal and interest payment
stays the same over the life of
your loan
• You know the total you will pay in
principal and interest over the life
of the loan
• Initial principal and interest payment
amount remains in effect for a limited
period
• You can't know in advance how much
total interest you will pay because your
interest rate changes
• If you can’t afford the increased
payments, you may lose your home to
foreclosure
2
ADJUSTABLE-RATE MORTGAGES
IS AN ADJUSTABLE-RATE MORTGAGE RIGHT FOR YOU?
3
*MCCHRMBOOK*
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Learn about how ARMs work
As you decide whether to move ahead with an
ARM, you should understand how they work
and how your housing costs can be affected.
Interest rate = index + margin
The interest rate on an ARM has two parts: the
index and the margin.
INDEX
An index is a measure of interest rates
generally that reflects trends in the overall
economy. Different lenders use different
indexes for their ARM programs.
Common indexes include the U.S. prime rate
and the Constant Maturity Treasury (CMT)
rate. Talk with your lender to find out more
about the index they use, which is also shown
on your Loan Estimate.
MARGIN
The margin is an extra percentage that the
lender adds to the index.
You can shop around to different lenders to
find the lowest combination of the index plus
the margin. Your Loan Estimate shows the
index and the margin being offered to you.
Changes to initial rate and payment
The initial interest rate and initial principal and
interest payment amount on an ARM remain in
effect for a limited period.
So, when you see ARMs advertised as 5/1 or
5/6m ARMs:
• The first number tells you the length of time
your initial interest rate lasts.
• The second number tells you how often the
rate changes after that.
For example, during the first five years in a 5/6m
ARM your rate stays the same. After that, the
rate may adjust every six months (the 6m in the
5/6m example) until the loan is paid off. This
period between rate changes is called the
adjustment period. Adjustment periods can
vary. Some last a month, a year, or like this
example, six months.
For some ARMs, the initial rate and payment
can be very different from the rates and
payments later in the loan term. Even if the
market for interest rates is stable, your rates and
payments could change a lot.
4
ADJUSTABLE-RATE MORTGAGES
LEARN ABOUT HOW ARMS WORK
5
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Use your Loan Estimate to
understand your ARM
Product
When you apply for a
mortgage, the lender gives you
a document called a Loan
Estimate. It describes
important features of the loan
the lender is offering you. This
section illustrates the parts of a
Loan Estimate that are specific
features of ARM loans. An
interactive, online version of a
Loan Estimate sample is
available at: cfpb.gov/arm-
explainer/
Loan Terms
Projected
Payments
Adjustable
Interest Rate
(AIR) Table
6
ADJUSTABLE-RATE MORTGAGES
USE YOUR LOAN ESTIMATE TO UNDERSTAND YOUR ARM
7
*MCCHRMBOOK*
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Loan terms
INTEREST RATE
The Loan Estimate shows the initial interest rate you
pay at the beginning of your loan term. This row also
shows how often your rate can change and how high it
can go.
MONTHLY PRINCIPAL & INTEREST
The Loan Estimate shows the initial monthly principal
and interest payment you’ll make if you accept this
loan. Your principal is the money that you originally
agreed to pay back on your loan. Interest is a cost
you pay to borrow the principal. The initial principal
and interest payment amount for an ARM is set only
for the initial period and may change after that.
THE TALK
You might hear, “An ARM makes sense
because you can refinance the loan before
your interest rate and monthly payment
increase."
Ask yourself, a spouse, or a loved one:
“What if the market value of the home
goes down?”
“What if our financial situation or our
credit score gets damaged by something
unexpected like a job loss or illness?”
“If we can’t refinance at a better rate, can
we afford the maximum interest rate and
payment increase under this loan?”
Example of “Loan terms” section. Find this on page 1 of
your own Loan Estimate
8
ADJUSTABLE-RATE MORTGAGES
USE YOUR LOAN ESTIMATE TO UNDERSTAND YOUR ARM
9
*MCCHRMBOOK*
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Example of “Projected payments” section. Find this on
page 1 of your own Loan Estimate
Projected payments
PRINCIPAL & INTEREST
The monthly principal and interest payment on
your ARM is likely to change after the initial
period. Review this section to see how your
payment can change based on your loan’s
interest rate.
ESTIMATED TOTAL MONTHLY
PAYMENT
Review this row to see the total minimum and
maximum monthly payments. The payments
include mortgage insurance, property taxes,
homeowners insurance, and any additional
property assessments or other escrow items.
Learn more about these mortgage terms at
cfpb.gov/mortgage-terms/
Keep in mind that other parts of your monthly
and annual housing costs can change, such as
your property taxes and homeowners
insurance payments.
THE TALK
Talk over how your financial life could be
affected if your ARM monthly payment
increases. In future years, you might face
money decisions like:
• Job changes
• School or other education expenses
• Medical needs and expenses
Because ARM adjustments are
unpredictable, you might have less or more
financial flexibility for other parts of your life.
10
ADJUSTABLE-RATE MORTGAGES
USE YOUR LOAN ESTIMATE TO UNDERSTAND YOUR ARM
11
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Adjustable Interest Rate (AIR) table
You should read and understand the AIR table
calculations before committing to an ARM. It's
important to know how your interest rate changes
over the life of your loan.
INDEX + MARGIN
Your lender is required to show you how your
interest rate is calculated, which is determined by
the index and margin on your loan. See page 2 of
this booklet for more about index and margin.
INITIAL INTEREST RATE
This is the interest rate at the beginning of your
loan. The initial interest rate changes to the index
plus the margin at your first adjustment (subject to
the limits on interest rate changes). Your loan
servicer tells you your new payment amount
seven to eight months in advance, so you can
budget for it or shop for a new loan.
MINIMUM/MAXIMUM INTEREST RATE
This shows how low or high your interest rate
could be over the life of your loan. Generally, an
ARM’s interest rate is never lower than the
margin.
CHANGE FREQUENCY
This indicates when the interest rate on your loan
will change. Your loan servicer sends you advance
notices of changes.
LIMITS ON INTEREST RATE CHANGES
This shows the highest amount your interest rate
can increase when there is a change.
Example of “AIR table” section. Find this on page 2
of your own Loan Estimate
“TEASER” RATES
Some lenders offer a “teaser,” “start,” or
“discounted” rate that is lower than their fully
indexed rate. When the teaser rate ends, your
loan takes on the fully indexed rate. Don’t
assume that a loan with a teaser rate is a good
one for you. Not everyone’s budget can
accommodate a higher payment.
Consider this example:
• A lender’s fully indexed rate is 4.5% (the index
is 2% and the margin is 2.5%).
• The loan also features a “teaser” rate of 3%.
• Even if the index doesn't change, your interest
rate still increases from 3% to 4.5% when your
teaser rate expires.
12
ADJUSTABLE-RATE MORTGAGES
USE YOUR LOAN ESTIMATE TO UNDERSTAND YOUR ARM
13
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COMPARE YOUR ARM OFFERS
Shop for at least three loan offers, and fill in the blanks
below using the information on your Loan Estimates:
ARM OFFER 1
ARM OFFER 2
FIXED-RATE
OFFER
Lender name
Loan amount
$
$
$
Initial interest rate
%
%
%
Initial principal and interest payment
$
$
$
Index
Margin
How long will the initial interest rate and initial payment
apply?
How high can my interest rate go?
%
%
%
How high can my principal and interest payment go?
$
$
$
My best loan offer is: _______________________
THE TALK
You are in control of whether or not to
proceed with an ARM. If you prefer to proceed
with a fixed-rate mortgage, here is one way to
start the conversation with a lender:
"A fixed-rate mortgage seems to be a better fit
for me. Let’s talk about what you can offer and
how it compares to other loans I may be able
to get."
14
ADJUSTABLE-RATE MORTGAGES
COMPARE YOUR ARM OFFERS
15
*MCCHRMBOOK*
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Review your lender’s ARM program
disclosure
Your lender gives you an ARM program disclosure
when they give you an application. This is the
lender’s opportunity to tell you about their different
ARM loans and how the loans work. The index
and margin can differ from one lender to another,
so it is helpful to compare offers from different
lenders.
Generally, the index your lender uses won’t
change after you get your loan, but your loan
contract may allow the lender to switch to a
different index in some situations.
GATHER FACTS
Review your program disclosure and ask your
lender questions to understand their ARM
loan offerings:
How are the interest rate and payment
determined?
Does this loan have interest-rate caps (that is,
limits on interest rate changes)?
How often do the interest rate and payment
adjust?
What index is used and where is it published?
Is the initial interest rate lower than the fully
indexed rate? (see “Teaser rates,” on page 12)
What type of information is provided in notices
of adjustment and when do I receive them?
Ask about other options offered by
your lender
Conversion option
Your loan agreement may include a clause that lets
you convert the ARM to a fixed-rate mortgage in the
future.
When you convert, the new rate is generally set
using a formula given in your loan documents. That
fixed rate may be higher or lower than interest rates
available to you in the market at that time. Also your
lender may charge you a conversion fee. Ask your
lender whether the loan you are being offered has a
conversion feature and how it works.
Special features
You can shop around to understand what special
ARM features may be available from different
lenders.
Not all programs are the same. Talk with your
lender to find out if there’s anything special about
their ARM programs that you may find valuable.
16
ADJUSTABLE-RATE MORTGAGES
REVIEW YOUR LENDER’S ARM PROGRAM DISCLOSURE
17
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Check your ARM for features that
could pose risks
Some types of ARMs have features that can
reduce your payments in the short term but may
include fees or the risk of higher payments later.
Review your loan terms and make sure that you
understand the fees and how your rate and
payment may change. Lower payments at the
beginning could mean higher fees or much
higher payments later.
Paying points to reduce your initial
interest rate
Lenders can offer you a lower rate in exchange for
paying loan fees at closing, or points.
With an ARM, paying points often reduces your
interest rate only until the end of the initial period-
the reduction most likely does not apply over the
life of your loan.
If you are using an ARM to refinance a loan,
points are often rolled into your new loan amount.
You might not realize you are paying points unless
you look carefully. Points are disclosed on the top
of Page 2 of your Loan Estimate.
Lenders may give you the option to pay points, but
you never have to take that option. To figure out if
you have a good deal, compare your cost in points
with the amount that you will save with a lower
interest rate.
Example of “Loan costs” section. Find this on page 2
of your own Loan Estimate
THE TALK
If your Loan Estimate shows points, ask your
lender:
• "What is my interest rate if I choose not to pay
points?"
• "How much money do I pay in points? And,
compared to the total reduction in my
payments during the initial period, am I
coming out ahead?"
• "Can I see a revised Loan Estimate with the
points removed and the interest rate
adjusted?"
18
ADJUSTABLE-RATE MORTGAGES
CHECK YOUR ARM FOR ADDITIONAL FEATURES
19
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Interest-only ARMs
With an interest-only ARM payment plan, you pay
only the interest for a specified number of years.
During this interest-only period, you have smaller
monthly payments, but you are not paying
anything toward your mortgage loan balance.
When the interest-only period ends, your monthly
payment increases—even if interest rates stay the
same—because you must start paying back the
principal plus the interest each month. Your
monthly payments can increase a lot. The longer
the interest-only period, the more your monthly
payments increase after the interest-only period
ends.
Payment option ARMs
Payment option ARMs were common before 2008
when the housing crisis began, and some lenders
might still offer them.
A payment option ARM means the borrower can
choose from different payment options, such as:
• A traditional principal and interest payment
• An interest-only payment (see above)
• A minimum payment, which could result in
negative amortization
Negative amortization happens when you are
not paying enough to cover all of the interest due.
Your loan balance goes up instead of down.
GATHER FACTS
Learn more information about payment option ARMs
and negative amortization at:
• cfpb.gov/payment-option-arm/
• cfpb.gov/negative-amortization/
WELL DONE!
Choosing the right home loan is just as
important as choosing the right home. By
equipping yourself with knowledge about ARMs,
you can decide whether or not this type of loan
is the right choice for you.
20
ADJUSTABLE-RATE MORTGAGES
CHECK YOUR ARM FOR ADDITIONAL FEATURES
21
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Mortgage Cadence Document Center FenId: 17495 © 1625 6/20
Consumer Handbook on
Adjustable-Rate Mortgages
ASK YOUR LENDER
• How high can my payment go?
• How high can my interest rate go?
• How long is my initial principal and interest
payment guaranteed?
ASK YOURSELF
• Have I shopped around to compare ARMs and
fixed-rate loans?
• If an ARM has a lower initial interest rate than a
fixed-rate mortgage, is paying less money now
worth the risk of an increase later?
• Can I afford the highest payment possible with the
ARM if I can’t sell the home, or refinance into a
lower rate, before the increase?
ONLINE TOOLS
CFPB website
cfpb.gov
Answers to common questions
cfpb.gov/askcfpb
Tools and resources for home buyers
cfpb.gov/owning-a-home
Talk to a housing counselor
cfpb.gov/find-a-housing-counselor
Submit a complaint
cfpb.gov/complaint
Last updated 06/20
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Completed 19 March 2021

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