The worst thing about the adjustable rate mortgages (ARMs) we have in the U.S. is not that they are so dangerous but that they are so complicated. Ironically, the complications arise primarily out of efforts to make them less dangerous.
These important features of ARMs in the United States protect consumers but they also befuddle them. The educational materials on ARMs that the government requires lenders to provide to borrowers are not much help. Even those who master these materials have great difficulty bringing them to bear on the specific ARMs they are being offered. And many borrowers want to protect themselves without having to learn a lot of boring stuff for which they will have no later use.
One way to meet this problem is by using calculators 9a or 9b at www.mtgprofessor.com to determine when and by how much your future payments might rise. Peace of mind comes from knowing that you will be able to deal with the payment changes that will come from the worst scenario you can imagine.
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