Here’s a rather peering look into the mechanics in ARM and Option Arm loans that is an interesting read…? There are many different possible reasons for rates (and payments) to reset or recast…

The short version — it’s so complicated that it takes around 10 paragraphs just to cover a hypothetical loan.

Any wonder why the average homebuyer might not understand what they’ve gotten themselves into?? Especially when some smooth talking salesman tells them that their payments won’t go above $X per month for the first year… and after that you can simply refinance if the payments adjust too high?