Adjustable Rate Mortgage - How To Avoid SurprisesImagine what it would be like if you could plan for changes to your adjustable rate mortgage.  I understand how precious homes are to Americans. I should! For over 20 years, I personally financed thousands of mortgages. When does your interest rate adjust? Do you have a prepayment penalty? It's easy to find out. I'm going to show you how. Adjustable Rate Mortgage HelpStart by locating your mortgage documents. Look for the large packet of paperwork you received after signing final loan documents with the title company, attorney, or escrow company. Tip: Create a secure place to safeguard your mortgage financing documents. Include them in your permanent financial records. Once you find this paperwork, locate 3 documents: 1. Promissory Note Confused? Don't get discouraged. At first glance you might not see any documents with these titles. That's because lenders have various ways of naming them. Here's how to easily identify these important documents related to your ARM. Promissory NoteThe first document is a Promissory Note. It states your interest rate, the original loan amount and confirms your mortgage is an ARM. Kate's Definition: A promissory note is a written contract containing the details by which borrowed money is repaid to a lender. Adjustable Rate Mortgage RiderNext, find the Adjustable Rate Mortgage Rider. It specifies exact dates that your interest rate is scheduled to adjust. For example, does your interest rate adjust once a year or after five years? Can the interest rate increase 1% each year or 5% after 3 years? Read carefully because some mortgages have interest rates that adjust as often as monthly. Look for the maximum interest rate adjustment throughout the mortgage. Kate's Definition: An adjustable rate mortgage is a home loan with an interest rate that changes even one time. It's also called an ARM or sometimes a flexible rate mortgage. Prepayment Penalty RiderThe last document is the Prepayment Penalty Rider. Nearly all subprime mortgages have prepayment penalties. The prepayment penalty causes many complications. Pay close attention to the document. Read it carefully. Understanding it can save you a lot of money. Kate's Definition: The Prepayment Penalty Rider defines the first day, month and year that a mortgage can be paid off. Lenders penalize the home owner if the mortgage is paid off before the prepayment penalty ends. Prepayment Penalty DetailsThe most common prepayment penalty is equal to about 6 mortgage payments. For example, if you owe $1,000 of mortgage interest each month, a prepayment penalty of approximately $6,000 would be added to your mortgage balance. You could end up owing more money than you originally borrowed. Even worse, if your mortgage balance becomes greater than your home's appraised value, selling a home or refinancing is very complicated. How To Plan For Adjustable Rate Mortgage ChangesHomeowners can plan for changes in adjustable rates. Understanding your ARM helps you anticipate and avoid surprises. Don't be like an ostrich with its head in the sand. After all, it's your adjustable rate mortgage. No one cares more about the future of your home than you. Read this letter I received from a contributor to this website asking for help because her mortgage rate was about to adjust: Adjustable Rate Mortgage Advice - Is there a loan program out there that will just fix our interest rate? It's time now to discover the truth about foreclosure help alternatives. Remember, assistance is available. More Help For Saving Your HomeAre you behind on your payments now? Have you received a notice of default? Don't give up. With a little knowledge, you can Stop Mortgage Foreclosure. Foreclosure Help is available. Act now if you think you are going to be late on a mortgage payment. If you anticipate being late on a mortgage payment, here's help for locating your lender to Stop Foreclosure Now. By understanding your Adjustable Rate Mortgage, you can anticipate interest rate adjustments and plan for increases in your mortgage payments. When promises to Sell Your House seem too good to be true, remember this fact. It is possible to sell a house and remain legally obligated on the mortgage. Find out more here. A limited offer, Mortgage Debt Relief provided help for homeowners subject to additional income taxes. Members of the HOPE NOW alliance proposed 3 ways to help American homeowners avoid foreclosure. Here's how to explain to your lender that you are trying to Prevent Foreclosure. The first step to stopping Foreclosure is understanding its impact on your life. Save Your Home! Save Your Life! How to take advantage of the current mortgage crisis to Stop Foreclosure. Learn from Donald Trump about negotiating a better deal. FHA Secure Revised FAQs alerted homeowners their eligibility was not dependent on late payments. Subprime Mortgage Loans fulfilled an important role in America by increasing homeownership but eventually they created a trap for home owners. You are invited to discover why every homeowner with a Subprime Mortgage needs a long term plan. Subprime Mortgages - Here is a long term plan I used to help homeowners transition to traditional mortgage financing. Can I do a Mortgage Loan Modification myself?" The answer is yes. But find out the first question you really should be asking. Ask Kate About Loan Modification - Ask a question, get an answer from Kate. Loan Modification Ask and Answer - A collection of questions regarding loan modification, Home Affordable Programs, HARP and HAMP, each with a individual answer from Kate. Return to Get-Your-Best-Mortgage-Rate home page from Adjustable Rate Mortgage Didn't find what you're looking for? 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