What would a borrower primarily be concerned with regarding interest rate adjustments in an ARM?

A borrower with an Adjustable Rate Mortgage (ARM) would primarily be concerned with the potential for payment increases because ARMs have interest rates that can fluctuate over time, typically after an initial fixed-rate period. This means that as interest rates rise, the monthly payments can also increase, potentially significantly impacting the borrower's budget and financial planning.

Understanding the potential for these increases is crucial for a borrower because it directly affects their affordability and ability to meet payment obligations. If the interest rates increase, borrowers may find themselves with higher payments than anticipated, which can lead to financial strain or even default on the loan. Hence, the concern over payment increases makes sense as it allows the borrower to prepare for possible changes in their financial responsibilities associated with the loan.

Other factors, such as the predictability of payment amounts, overall loan duration, and total cost of the home, are important but secondary to the specific concern regarding how interest rate adjustments can lead to variations in monthly payments. A focus on understanding the potential for price increases helps borrowers make informed decisions about their mortgage and financial future.