Which document is primarily designed to assist and inform borrowers regarding adjustable-rate mortgages?

The CHARM booklet, which stands for Consumer Handbook on Adjustable-Rate Mortgages, is specifically designed to provide essential information and guidance to borrowers considering adjustable-rate mortgages (ARMs). This document outlines the mechanics of ARMs, including how interest rates are determined, when adjustments occur, and the potential risks associated with these types of loans.

It serves as a crucial resource for borrowers by explaining various terms and features related to adjustable rates, which can significantly affect monthly payments over time. By giving borrowers a clearer understanding of ARMs, the CHARM booklet helps them make informed decisions about their mortgage options.

In contrast, other documents such as the Closing Disclosure and the Loan Estimate focus on providing details about specific loan terms, closing costs, and the overall loan amounts but do not specifically address the nuances of adjustable-rate mortgages. The HUD-1 Settlement Statement is primarily used for federally related mortgage loans, summarizing the financial aspects at the closing but lacks the educational purpose that the CHARM booklet provides regarding ARMs.