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Blog Web's Best Mortgage Rates Source for 15 Years |
One Year Treasury Security |
ADJUSTABLE RATE MORTGAGE |
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1 Year T-bill ARM(Index usually used with 1/1 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 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 Adjustable Rate Mortgage (ARM) will be. The loan is fully amortized (or paid off) in 30 years if the normal payment schedule is followed. (Also see anatomy of an Adjustable Rate Mortgage (ARM) for additional information).
1 Year Treasury Average Adjustable Rate Mortgage (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 Adjustable Rate Mortgage (ARM) will be. The loan is fully amortized (or paid off) in 30 years if the normal payment schedule is followed. (Also see anatomy of an Adjustable Rate Mortgage (ARM) for additional information). Monthly Treasury Average Adjustable Rate Mortgage (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 Adjustable Rate Mortgage (ARM) will be. (Also see anatomy of an Adjustable Rate Mortgage (ARM) for additional information). One Year T-bill Index History
The 1 Year T-Bill Index is the most commonly offered index for
Adjustable Rate Mortgages. It is considered to be more volatilte than the COFI
Index (11th District Cost of Funds Index) |
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