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An adjustable-rate mortgage (ARM) is a loan in which the interest rate may change periodically, usually based upon a pre-determined index. The ARM loan may include an initial fixed-rate period that is typically 3 to 10 years.
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Most lenders tie ARM interest-rate changes to changes in an "index rate." These indexes usually go up and down with the general movement of interest rates. If the index rate moves up, so does your mortgage rate in most circumstances, and you will probably have to make higher monthly payments.
Typical index rates that are associated with ARMs are LIBOR (London Interbank Offered Rate), COFI (11 District Cost of Funds), T-Bill (U.S. Treasury Bill) and cmt (constant maturity treasury), etc. A margin is a fixed percentage rate that you add to your index rate to obtain the fully indexed rate for an adjustable-rate mortgage.
Current 5-Year ARM Mortgage Rates. The following table shows the rates for ARM loans which reset after the fifth year. If no results are shown or you would like to compare the rates against other introductory periods you can use the products menu to select rates on loans that reset after 1, 3, 5, 7 or 10 years.
Index changes on a weekly basis and can be volatile. 1-year T-Bill. This index is the weekly average yield on U.S. Treasury securities adjusted to a constant maturity of 1 year. This index is used on the majority of ARM loans. With the traditional one year adjustable rate mortgage loan, the interest rate is subject to change once each year.
Reamortize Definition May, Kristen. "Definition of Reamortiz. translation and definition "reamortize a loan", Dictionary English-English online. Showing page 1. Found 0 sentences matching phrase "reamortize a loan".Found in 0 ms. Translation memories are. Definition. The principal balance on a mortgage loan is the outstanding balance due on the original loan amount.
An ARM margin is a fixed percentage rate that is added to an indexed rate to determine the fully indexed interest rate of an adjustable rate mortgage (ARM).
A variable-rate mortgage, adjustable-rate mortgage (ARM), or tracker mortgage is a mortgage loan with the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets. The loan may be offered at the lender’s standard variable rate/base rate.