Posted on: 15th Dec, 2009 10:05 am
Are all hybrid ARMs (that are fixed for 3-10 years) tied to LIBOR, and annual adjusting ARMs to the MTA? Is there some formula for knowing which programs are tied to which index, or is it lender specific instead?
Hi,
It depends on the investor to whom the lender will sell the loan. The investor will determine on which index they should base the loan on. As a borrower, you shouldn't be too bothered about the indices, rather you should shop for a loan program with lowest interest rate.
It depends on the investor to whom the lender will sell the loan. The investor will determine on which index they should base the loan on. As a borrower, you shouldn't be too bothered about the indices, rather you should shop for a loan program with lowest interest rate.
You can research all of the different types of arms here on this site (upper right corner of your screen). Or you can find more about Adjustable Mortgages Here
Different ARM products are tied to different indices. You might want to google the history of the indices to see there movement over the past couple of years. Most important when searching for an ARM loan is the initial start rate and the annually adjusmtments once the loan adjusts.
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