Option Adjustable Rate (Option ARM)
Option ARMs can adapt to fit your lifestyle. They offer flexible payment options and qualification standards. Traditional home loan payments are the same each month for the term of the loan. But with an Option ARM, you can choose a few payment choices each month such as Minimum payment, Minimum payment, Fully amortized payment, 15-year payment -which gives you the flexibility to change your mortgage payment as your needs change.
1 Year Treasury ARM (1 YR T-Bill)
The rate is fixed for 1 year (this initial rate is sometimes referred to as the teaser or start rate) after which in the 2nd year the rate will adjust based on the 1-year treasury index which is added to a pre-determined margin (typically ranging from 2.25-3.00%) to arrive at the new annual rate. Ask what the margin, life cap and periodic payment caps of your ARM will be. The loan is fully amortized (or paid off) in 30 years if the normal payment schedule is followed.
1 Year Treasury Average ARM
The rate is fixed for 1 year (this initial rate is sometimes referred to as the teaser or start rate) after which in the 2nd year the rate will adjust based on the 1-year treasury average index which is added to a pre-determined margin (typically ranging between 2.25-3.00%) to arrive at the new annual rate. Ask what the margin, life cap and periodic payment caps of your ARM will be. The loan is fully amortized (or paid off) in 30 years if the normal payment schedule is followed.
Monthly Treasury Average ARM (MTA)
The rate is fixed for a 3 month period (this initial rate is sometimes referred to as the teaser or start rate) after which your rate is based on the monthly treasury average index which is added to a pre-determined margin (typically ranging between 2.25-3.00%) to arrive at the new monthly rate. This loan may also have periodic payment caps as well as interest rate caps, and therefore could have the potential for negative amortization. Ask what the margin, life cap and periodic caps of your ARM will be.
COFI ARM (Cost of Funds)
The rate is fixed for a 3 month period (this initial rate is sometimes referred to as the teaser or start rate) after which your rate is based on the 11th district cost of funds index (COFI) which is added to a pre-determined margin (typically ranging between 2.25-3.00%) to arrive at the new monthly rate. This loan may also have periodic payment caps and therefore the potential for negative amortization. Ask what the margin, life cap and periodic caps of your ARM will be.
6 Month CD ARM
The rate is fixed for 6 months (this initial rate is sometimes referred to as the teaser or start rate) after which in the 7th month the rate will adjust based on the 6-month CD index which is added to a pre-determined margin (typically ranging from 2.25-3.00%) to arrive at the new semi-annual rate. Ask what the margin, life cap and periodic payment caps of your ARM will be. The loan is fully amortized (or paid off) in 30 years if the normal payment schedule is followed.
LIBOR ARM (London Interbank Offer Rate)
The rate is fixed for 6 months (this initial rate is sometimes referred to as the teaser or start rate) after which in the 7th month the rate will adjust based on the 6-month LIBOR index which is added to a pre-determined margin (typically ranging from 2.25-3.00%) to arrive at the new semi-annual rate. Ask what the margin, life cap and periodic payment caps of your ARM will be. The loan is fully amortized (or paid off) in 30 years if the normal payment schedule is followed.
New Adjustable Rate Mortgage
Option ARM - 1 Month Option Adjustable Rate Mortgage
