Payment Adjustment Period
Definition
- The time during which payments on an adjustable-rate mortgage (ARM) may go up or down.
Synonyms
rate adjustment period, adjustment period, arm adjustment period, mortgage adjustment period
Related Terms and Acronyms
- Adjustable-Rate Mortgage (ARM) — Acronym,
- A type of mortgage loan program in which the interest rate and payments may be adjusted as frequently as every month. The principal loan balance or term of the loan may also be adjusted to reflect the rate change. The purpose of the program is to allow mortgage interest rates to fluctuate with market conditions.
➥ A type of variable rate mortgage product. - Adjustment Period — Definition,
- The time between changes in the interest rate in an adjustable-rate mortgage.
- Cap — Definition,
- A limit imposed on an item.
- The top limit on the amount the interest rate can increase during a single time period of an adjustable-rate mortgage. Every ARM has two caps: a periodic cap, which limits the periodic changes to the interest allowed in the loan agreement, and a lifetime cap, which governs the total increase that can be imposed during the life of the loan.
- Change Frequency — Definition,
- The scheduled period in which an adjustable-rate mortgage adjusts.
- Variable Rate Mortgage (VRM) — Acronym, Very Important,
- Home loan in which the interest rate is changed periodically based on a standard financial index. Also called an "Adjustable-rate Mortgage."
➥ A type of mortgage loan offered by brokers and lenders.
