Internet presentation by Mortgage Market
Information Services, Inc. (opens in new window)
One of the Nation's Leading Publishers of Home Finance
Information.
PEOPLE ARE ASKING
"Some newspaper ads for home loans show surprisingly low
rates. Are these loans for real, or is there a catch?"
Some of the ads you see are for adjustable rate mortgages (ARMs).
These loans may have low rates for a short time--maybe only for the
first year. After that, the rates can be adjusted on a regular basis.
This means that the interest rate and the amount of the monthly payment
can go up or down.
"Will I know in advance how much my payment may go
up?"
With an adjustable-rate mortgage, your future monthly payment is
uncertain. Some types of ARMs put a ceiling on your payment increase or
rate increase from one period to the next. Virtually all must put a
ceiling on interest-rate increases over the life of the loan.
"Is an ARM the right type of loan for me?"
That depends on your financial situation and the terms of the ARM.
ARMs carry risks in periods of rising interest rates, but can be cheaper
over a longer term if interest rates decline. You will be able to answer
the question better once you understand more about adjustable-rate
mortgages. This booklet should help.
The above text was extractly directly from the Consumer
Handbook On Adjustable Rate Mortgages, as published by the
Federal Reserve Board and Office of Thrift Supervision. Although the above
text is public domain, this electronic booklet is copyrighted © 1996
by Mortgage Market Information Services, Inc. Readers of this electronic
booklet are allowed to print the booklet for non-profit distribution
Pg 1 -- Introduction and credits
Pg 2 -- PEOPLE ARE ASKING
Pg 3 -- PEOPLE ARE ASKING (continued)
Pg 4 -- WHAT IS AN ARM?
Pg 5 -- HOW ARMS WORK:THE BASIC FEATURES
Pg 6 -- FEATURES (continued)
Pg 7 -- CONSUMER CAUTIONS (Discounts)
Pg 8 -- CONSUMER CAUTIONS (Payment shock)
Pg 9 -- HOW CAN I REDUCE MY RISK?
Pg 10 -- REDUCE MY RISK (continued)
Pg 11 -- REDUCE MY RISK (continued)
Pg 12 -- REDUCE MY RISK (continued)
Pg 13 -- REDUCE MY RISK (continued)
Pg 14 -- WHERE TO GET INFORMATION
Pg 15 -- INFORMATION (continued)
Pg 16 -- GLOSSARY
Pg 17 -- GLOSSARY (continued)
Pg 18 -- MORTGAGE CHECKLIST
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