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Adjustable Rate Mortgage Loans:Advantages and Disadvantages |
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Adjustable Rate Mortgage Loans:ARM Components |
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The
ARM components include the following:
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Adjustable Rate Mortgage Loans:Notes on the Index Rate |
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Two widely used ARM indexes are the Treasury Rate Index and Cost of Funds Index. Lenders on the East Coast and Mid-West typically use the Treasury Rate Index:
Another widely used index is the LIBOR
You will find that about 80% of all ARMs on the market today use one of the three above indexes.
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Adjustable Rate Mortgage Loans:Assumability and Convertibility |
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An assumability clause allows the seller of the home to transfer the mortgage loan to the homebuyer.
This assumability feature can become a selling point in the sale of your home.
The convertibility clause allows the borrower to convert their existing ARM over to an prevailing fixed-rate loan.
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Adjustable Rate Mortgage Loans:Other ARM Notes |
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Teaser Rates:
Payment Recalculations:
You should double check the banks calculation
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