It might be a good idea to read through the questions once to make sure you have the information you need before you start filling in answers. The best way to get the information is to speak to the lender or your mortgage broker but keep in mind that until you pay an application fee and lock in your rate, the terms of the loan may change. The more points you pay, the lower the rate you may obtain. This is the amount you pay the lender for processing and originating your loan. Such loans are also called adjustable mortgage loans or variable-rate mortgages.
Lenders generally charge lower initial interest rates for ARMs than for fixed-rate mortgages.
The interest rate and monthly payment of most ARMs change every year, every three years, or every five years. The period between one rate change and the next is called the adjustment period. They limit the interest-rate increase over the life of the loan. If the index rate moves up, so does your mortgage rate, and your monthly payments, in most circumstances. Another common index is the national or regional average cost of funds to savings and loan associations.