|
The CMT index is based on the weekly average yield on United States
Treasury securities adjusted to a constant maturity of 1 year, as made
available by the Federal Reserve. The CMT Index is based on yields
published in the release entitled the “Selected Interest Rates-H15”
which is published weekly by the Federal Reserve Board. The CMT ARM
does not allow deferred interest. The interest rate and payment will
adjust annually after the initial fixed period of 1 year, 3 years or 5
years on the 1/1, 3/1 and 5/1 products respectively. The interest only
CMT ARM is fixed for the first 5 years. After 5 years the loan is fully
amortizing for the remaining 25 years. |
The Option ARM uses the 12 MTA index (monthly treasury average) index.
This index moves more slowly than most interest rate indexes because it
reflects the average of rates over the last 12 months. Actual margin
varies with transaction type and type of loan. Margin listed is for 80%
loan on the one month option ARM. Loan amounts over $2,500,000 have
increased margins. The 40 year mortgage has a slightly higher margin,
the investor programs have higher margins. The 89.9% loan has a higher
margin but no mortgage insurance premium. Margins can be reduced by
paying points. |
The LIBOR index (London Inter-Bank Offered Rate) is based on the average
of inter-bank offered rates for one-year U.S. dollar-denominated
deposits in the London market, as published in The Wall Street Journal.
The LIBOR ARM loan does not allow deferred interest. The interest rate
and payment will adjust annually after the initial fixed period of 1
year, 3 years or 5 years on the 1/1, 3/1 and 5/1 products respectively.
The interest only LIBOR ARM is fixed for the first 5 years. After 5
years the loan is fully amortizing for the remaining 25 years. |
