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Simple English definitions for legal terms

adjustment period

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A quick definition of adjustment period:

An adjustment period is the time when the interest rate on an adjustable-rate mortgage (ARM) can change. This happens at scheduled intervals, which can be every month, every six months, every year, or even longer. For example, a 5/6 ARM has a fixed interest rate for the first five years, and then the rate can change every six months. A 15/15 ARM has a fixed rate for the first 15 years, and then the rate can change once for the remaining 15 years.

A more thorough explanation:

Adjustment period refers to the time frame during which the interest rate on an adjustable-rate mortgage (ARM) can be reset. This period is set at regular intervals, such as monthly, semi-annually, annually, or every few years.

For instance, a 5/6 ARM has an initial interest rate that is locked for five years, after which the interest rate can be adjusted every six months. On the other hand, a 15/15 ARM allows for only one interest rate change during the entire life of the mortgage. After an initial rate for 15 years, the borrower assumes a second interest rate for the remaining 15 years.

Adjustment periods are important because they determine how often the interest rate on an ARM can change, which can affect the borrower's monthly mortgage payments. For example, if the interest rate increases during an adjustment period, the borrower's monthly payments may also increase.

Overall, adjustment periods are a crucial aspect of adjustable-rate mortgages, and borrowers should carefully consider the length of the adjustment period when choosing an ARM.

  • A 3/1 ARM has an initial interest rate that is locked for three years, after which the interest rate can be adjusted every year.
  • A 7/23 ARM has an initial interest rate that is locked for seven years, after which the interest rate remains fixed for the remaining 23 years of the mortgage.

These examples illustrate how adjustment periods work in different types of ARMs. In the first example, the interest rate can be adjusted every year after the initial three-year period, while in the second example, the interest rate remains fixed for 23 years after the initial seven-year period.

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JumpySubsequentDolphin
21:35
no he’s literally like 8 and he fully just put his head on my bicep and slept
JumpySubsequentDolphin
21:35
he has since moved
22:12
@SplitterusClitterus: me yesterday
gulc baby pls text me back... i miss you ...... :(
22:23
i just went into a discord vc and yelled "YALL I JUST GOT INTO J.M. SCHOOL OF LAW"
22:24
people were getting excited :sob:
22:25
then someone was like "what does jm stand for" and i was like .. well
AHHAHAHAHAHAHHAHAHAHAHAHAH
@JumpySubsequentDolphin: wait this is so cute, also where r u going
JOE MBIDEN
JumpySubsequentDolphin
22:39
@splitty Oregon!
oh yay for what thats so random
JumpySubsequentDolphin
22:45
haha my brother and sister in law live there
so cutie oregon is beatiful
soyalmondoatmilk
8:38
good morning! hoping waves will come our wave today
8:42
GW wave today?
8:57
There’s someone I found on here with the username threeoutchange and if my understanding is correct that’s a reference to the debut album by a pretty cool 90s-00s Japanese band called Supercar. I geeked a little
8:57
It could just be a baseball reference I don’t get though lol
Dkk
9:00
@renard99: also, the same band that does a song in the anime Eureka 7 which I watched when I was like idk, 12
9:00
Yeah! They are pretty good. Three Out Change is an awesome J-rock record
Dkk
9:01
I will probably not listen to them more but fun fact. Really random to start the day. An omen that the waves will be very random today.
Dkk
9:03
Fuck, reading the wikipedia now. Literal last song they did before they broke up was Storywriter. Wow.
9:05
That one is a masterpiece
9:05
My favorite song by them is Recreation
glovediedthisishismom
9:05
snowing
Dkk
9:07
@renard99: man, hard to find.
Dkk
9:07
@glovediedthisishismom: Congrats on the snow.
Dkk
9:16
@renard99: Poetic and nice.
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