Posted on: 07th Jan, 2009 10:39 am
How do you explain the definition Of the Index and how it is accumulated and also what is the Margin...
Definition of Index
Definiton of Margin
How do you determine how its origionated
Definition of Index
Definiton of Margin
How do you determine how its origionated
Im assuming this is pertaining to mortgage and not stocks
Definition of Index - The relative value of a variable in comparison with itself on a different date. A variable indicator of value.
Typical indexes that banks use are - Prime rate, LIBOR, Cost of Svings, Cost Of Funds
Is usually expressed as a percentage.
Definiton of Margin - is a collateral to cover the risk of giving the loan to the borrower. Usually a set percentage added to an index.
How do you determine how its origionated - index is just is. It can be anything. Temperature is an index. Most banks use more stable indexes though. Margin is then added to an index to get the final rate that a borrower pays.
So look at your mortgage papers to find out what your index is and what your margin is.
Search the internet for the index value then add the margin to it.
:wink:
Definition of Index - The relative value of a variable in comparison with itself on a different date. A variable indicator of value.
Typical indexes that banks use are - Prime rate, LIBOR, Cost of Svings, Cost Of Funds
Is usually expressed as a percentage.
Definiton of Margin - is a collateral to cover the risk of giving the loan to the borrower. Usually a set percentage added to an index.
How do you determine how its origionated - index is just is. It can be anything. Temperature is an index. Most banks use more stable indexes though. Margin is then added to an index to get the final rate that a borrower pays.
So look at your mortgage papers to find out what your index is and what your margin is.
Search the internet for the index value then add the margin to it.
:wink: