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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 (primary residence). 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 or by having high credit scores. There may be restrictions to the margin reductions. Non owner occupied properties have higher margins. |
The One Year 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. |
