If you have a fixed-rate loan, the interest rate is set for the life of
the loan. However, many companies offer variable rate mortgages, also known
as adjustable rate mortgages or ARMs. These provide for periodic interest-rate
adjustments. If your loan contract allows the mortgage company to adjust
or change the interest rate, be sure you understand when the company has
the right to change the interest rate, whether there are any limits on how
much the interest or payments can change, and how often the company can
change the rate. You also should know what basis the company will use to
determine a new rate of interest.
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