Adjustable Rate Mortgage, ARM
Adjustable Rate Mortgage (ARM)
Also
known as a variable
rate mortgage. The interest
rate on these mortgages changes periodically.
Variable
or adjustable
loans are loans whose interest rate fluctuates over the period of
the ...
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Margin
Margin
The amount a lender adds to the index on an adjustable rate mortgage to establish the adjusted interest rate. Margin is constant throughout the life of the loan.
INDEX + MARGIN = FULLY INDEXED RATE
Example using the 1 Year Treasury:
1 Year Treasury Index = ...
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