Posted on: 16th Feb, 2011 04:39 pm
I have 5 year ARM ending in 1 june, 2011. My current apr is 6.5%. what will be my apr after 1 june, 2011.
You need to go in to your paperwork and find the adjustable note rider
It will tell you How often the note can change - the index the note is attached to and the margin -
It will also state the maximum it can adjust on the first adjustment and every adjustment after that - we need that info to answer your question
B
It will tell you How often the note can change - the index the note is attached to and the margin -
It will also state the maximum it can adjust on the first adjustment and every adjustment after that - we need that info to answer your question
B
The 5yr Arm usually has an adjustment caps of 2/2/5. This means that the first adjustment can go up or down two percent. Every year after that it can go up or down 2 % but, it can't exceed over 5% of the initial start rate. Your loan officer who originated the loan set you up with a margin (should be on your closing papers) and the loan is tied to either the LIBOR or the Treasury(which is the index). Adding the margin and the index will determine whether your rate will go up or down.
If you 5-1 was IO for the first 5 years, could be your adjustment limits could be 5/2/5. Actually better for you assuming no major short term rate increase. Most likely your RATE will be going down and in that case a higher first adjustment cap would be better.
It is unlikely that the APR given at application was 6.5%. More likely this is the initial note rate. Youl need to check your rider for index and margin but my guess is that your rate for year 6 will be in the 3s depending what the first adjustment cap is.
It is unlikely that the APR given at application was 6.5%. More likely this is the initial note rate. Youl need to check your rider for index and margin but my guess is that your rate for year 6 will be in the 3s depending what the first adjustment cap is.
