26 Questions To Ask When Getting An ARM Loan

1. Initial interest rate 2. Actual note rate 3. Total number of points 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 penalty? If yes, explain. 19. Is there a conversion feature? If yes, explain. 20. Is PMI coverage required? If yes, explain details including initial premium and renewal charges. 21. What will be my initial payment (P&I) be? 22. Under a worst case scenario, show monthly payments for the next __ years. 23. What are the estimated closing costs of this loan? 24. What fees, if any, do we pay at application? When are the other fees paid? Explain. 25. Will my monthly payments include escrow payments (taxes & insurance, etc.) ? Explain. 25. Will my monthly payments include escrow payments (taxes & insurance, etc.)? Explain. 26. Please explain all other details of this program that we have not addressed.