Glossary of Notary Public, Mortgage, Signing Agent, and Loan Signing Terms.
Adjustable Rate Note
Phonetics: ad·just·a·ble rate note \ə-'jəs-tə-bəl\ \'rāt\ \'nōt\
An adjustable rate Note contains information about what the initial interest rate is, when it can be adjusted, and by how much it can be adjusted. Please see, "Note" for more general information about Note documents. Additionally, other information in this document would typically include: The margin which is percentage points that lenders add to the index rate to determine the ARM's rate; Interest rate caps. Initial discounts; Negative amortization which means that the mortgage balance is increasing which occurs when monthly mortgage payments are not enough to pay all the interest due on the mortgage; Conversion which is an agreement wiht the lender that may have a clause that allows the buyser to convert the ARM to a fixed rate mortgage at a designated time; Prepayment which allows the borrower to pay off the loan without paying a penalty.
Adjustable Rate Mortgage
Adjustable Rate Rider