THE OVERVIEW
How this option works
An adjustable-rate mortgage has an initial period when its interest rate is set, followed by scheduled adjustments. After adjustment, the rate and payment may rise or fall according to the loan’s index, margin, adjustment schedule, and caps.
The initial payment may not show what the payment could become later. Review the first adjustment date, how often the rate can change, periodic and lifetime caps, and the highest possible payment. Do not assume you can sell or refinance before a change.