Question:

What is adjustable rate mortgage reset date?

Answer:

Adjustable rate mortgages are all having an introductory period with a fixed rate. However, when the term expires, an adjustable rate mortgage reset will take place every once in a while. The interest rate will then begin to adjust as per ARM agreement - usually once or twice a year, although it is possible to adjust once a month or once in several years.

The lender is required to notify you anytime rate reset is going to occur several weeks before the adjustable rate mortgage reset date. If your ARM is convertible - that is, the agreement allows the ARM to be changed into a fixed-rate mortgage without heavy refinancing costs; or if you have planned to sell the house before the first adjustable rate mortgage reset date arrives, you needn't worry about this at all.

However, if you are staying with your lender and with your mortgage for longer, it will be nice to know your adjustable rate mortgage reset date, plus you should follow your ARM index and know in advance how your payment will be affected.

The ARM reset date is the cornerstone when you decide to refinance. Since refinancing into an FRM only occurs when rates are rising, knowing in advance whether the adjustable rate mortgage reset rate will go up or down will be a factor whether to refinance now, or wait until the next adjustable rate mortgage reset date.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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