General FAQs

How is the interest calculated on an Adjustable Rate Mortgage (ARM) Loan? What is an Index, margin, and how is it relavent to Adjustable Rate Mortgage loans?
The interest rate is calculated on an Adjustable Rate Mortgage (ARM) by adding the Index + Margin = Your Interest Rate. The index is a benchmark interest rate that reflects general market conditions. The index amount changes based on the market, and is maintained by a third party. The margin is set by the lender when you apply for a loan, and this amount generally won’t change after closing.
What is an ARM Adjustment Period?
An adjustable rate mortgage (ARM) adjustment period is the frequency with which the interest rate may change. The most common ARM adjustment periods are every six months or twelve months. The frequency of ARM adjustments are outlined in the Note.
What is an Adjustable Rate Mortgage or ARM Loan?
An Adjustable Rate Mortgage or ARM loan is a mortgage where the interest rate changes periodically over the life of the loan.
What is an Adjustment Date and Initial Interest rate?
An adjustment date is the day when the interest rate changes on an adjustable rate mortgage (ARM). After an initial period where an ARM loan interest rate remains the same, the rate changes on the adjustment date to reflect the new ARM loan rate. The ARM loan rate will then continue to adjust over the remaining life of the loan as described in your Note. An initial interest rate is the starting interest rate of an adjustable rate mortgage (ARM). This initial interest rate on an ARM loan is fixed for a certain period of time, and then adjusts to reflect overall market rates.
What is an amortization schedule and how can I see it?
An amortization schedule is a schedule showing the effects of making principal and interest payments over the life of your loan as it relates to the loan balance and interest paid. It can be a useful tool to help determine the effects of making more than the required monthly payment, or in observing how much of your payment is applied to the principal reduction versus interest over the life of your loan. You can see your amortization schedule by visiting the Amortization Calculator page of your online account and submitting the needed inputs to calculate your results. For more general information, visit the Home Loan Calculators page.