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We're the Consumer Financial Protection Bureau (CFPB), a U.S. government agency that makes sure banks, lenders, and other financial companies treat you fairly.

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I received notice of an upcoming rate change on my adjustable-rate mortgage (ARM). Why did I receive this and what should I do now?

Answer:

Generally, if you have an adjustable-rate mortgage (ARM), your mortgage servicer is required to send you an estimate of your new payment.

If your interest rate is being reset for the first time, your lender must send you the estimate seven to eight months before your first payment at the new rate is due.

If you have an ARM that has already reset once, you will be notified two to four months before the first payment at the new rate is due if the next reset is going to change your payment amount.

This advance notice is designed to give you time to budget for your new payment or shop for a different home loan.

The advance notification of your rate change needs to show, among other things:

  • The current and new interest rates (or an estimate, if appropriate)
  • The current and new payment amounts
  • The date the first new payment is due

For the notification that comes seven to eight months before your first rate reset, your lender must also include:

Before your rate changes, there are different steps you can take depending on your situation:

  • Budget for your new payment
  • Shop for a better loan
  • Find help from a HUD-approved housing counselor to evaluate your options

If you have a problem with your mortgage, you can submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372).

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The content on this page provides general consumer information. It is not legal advice or regulatory guidance. The CFPB updates this information periodically. This information may include links or references to third-party resources or content. We do not endorse the third-party or guarantee the accuracy of this third-party information. There may be other resources that also serve your needs.

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