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The real issue with the adjustable rate mortgage on your FHA home is that it is impossible to predict when or how much the interest rate may change.

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May 22, 2017
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What is an Adjustable Rate FHA Mortgage?

FHA Common Question #22

When shopping for an FHA home, you will need to consider carefully whether you would like a fixed rate loan or an adjustable rate FHA mortgage. If you choose the adjustable rate loan for your FHA home, you'll need to do some homework about the index. The index is the measurement of how the interest rate changes. Your lender will use this index to determine interest rate flexibility.

The real issue with the adjustable rate mortgage on your FHA home is that it's impossible to predict when or how much the interest rate may change. Ask your lender to explain the index in detail and how it works. Also, be sure to ask how much the index for your potential adjustable rate FHA home mortgage has changed recently, and where the information is reported. The flexible rate may require you to be more informed since the interest is subject to change.

NEXT:  Are There Limits to FHA Mortgage Loans?

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