How long before the interest adjustment must the first ARM disclosure be sent to the borrower?

The first disclosure for an Adjustable-Rate Mortgage (ARM) must be sent to the borrower at least seven months before the interest rate adjustment takes place. This requirement is in place to ensure that borrowers are adequately informed about their upcoming adjustments in interest rates, allowing them sufficient time to prepare for potential changes in their monthly mortgage payments.

The seven-month timeline is specifically designed to provide borrowers with crucial information regarding the terms of their mortgage, including how often interest rates will adjust and what factors may lead to changes in their payments. This proactive communication helps promote transparency and allows for better financial planning on the part of borrowers, contributing to a more informed consumer base in the mortgage market.