What happens when my ARM's fixed-rate period ends?

What notice will I get before my first adjustment?

Under the federal Truth in Lending rules, the servicer must send a separate notice at least 210 days, but no more than 240 days, before the first payment at the adjusted rate is due. If the new rate isn't known yet, the notice gives an estimate and labels it as one. It also explains the index, margin, caps and your options, such as refinancing or asking about other arrangements.

What about later adjustments?

For adjustments that change your payment, the servicer must send a notice at least 60 days, but no more than 120 days, before the first payment at the new amount is due. It shows the old and new rate and payment and how the new rate was figured.

What are my options before the rate resets?

• Keep the loan. If the new payment fits, you don't have to do anything.
• Refinance. Into a fixed rate or another ARM, if you qualify. Start early, since a refinance takes weeks. See when to refinance.
• Pay down principal. Extra principal lowers the balance the new rate applies to. Check your note for any prepayment terms.
• Sell. If you planned to move anyway, compare the timing with the reset date.

What if I can't afford the new payment?

Call your servicer as soon as you see the notice, before you miss a payment. Under federal rules, a servicer must review a complete application for help (loss mitigation), and a HUD-approved housing counselor can help you for free. Waiting makes the options fewer.

Does anything else change my payment at the same time?

In New Hampshire, the escrow part of your payment changes with your town's tax rate, which is set each fall, and your insurance premium. A rate reset and an escrow review can land close together, so read both notices. See NH tax bills and escrow.