When rates have risen during the introductory period of your mortgage loan, the first reset can be steep. That’s because not only does your index, which determines your interest rate, reset upward to reflect current interest rates, but for the first time, your mortgage company tacks on its margin, an extra percentage point or two for them. Both index and margin components then continue for the term of the loan. If you hold an adjustable-rate mortgage, or ARM, your rate will reset by definition on one or more “change dates,” with the largest hike coming at the end of an introductory or “teaser” rate period of anywhere between one month and 10 years. Home Buying For Dummies, 3rd edition

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