Questions to Ask When Getting an ARM

  1. Initial Interest Rate

  2. Actual Note Rate

  3. Total Number of Points (Includes Loan Origination Fee

  4. Annual Percentage Rate

  5. Length of Loan

  6. Index Used

  7. Today's Value of Said Index

  8. Margin Used

  9. Is There a Payment Cap? Explain.

  10. Does the Loan Have Any Potential Deferred Interest? If Yes, Explain.

  11. Does the Loan Have the Standard Positive Amortization? If No, Explain.

  12. How Often is the Rate Subject to Change?

  13. Is There a Per Adjustment Interest Rate Cap? If Yes, What Is It?

  14. Is There a Lifetime Interest Rate Cap? If Yes, What Is It?

  15. Are the Caps Based on the Note Rate, or the Initial Interest Rate? Explain.

  16. How Long is the Rate Quoted Guaranteed? Explain.

  17. Is the Loan Assumable? If Yes, Explain.

  18. Is There a Prepayment Penatly? If Yes, Explain.

  19. Is There a Conversion Feature? If Yes, Explain.

  20. Is PMI Coverage Required? If Yes, Explain Details Including Initial Premiumm and Renewal Changes.

  21. What Will Be My Initial Payment (P&I) Be?