Posted on: 17th Aug, 2010 02:11 pm
I have a 5/1 hybrid libor arm coming up in march 2011 and am trying to figure out what my rate would be if it was due know. According to my loan they will add 2.375 to current index to determine rate, rate not going higher than 11.5. How do i find and compute current index to determine rate?
As of today, the LIBOR index is .946. If your margin is 2.375 (which would be very unusual, it's usually 2.25) your new rate would be 2.375 + .946 = 3.321% rounded up to the nearest 1/8th = 3.375%
Contrary to media misinformation, adjustable rate mortgages are adjusting DOWN, not up. Make sure a downward adjustment is allowed in your terms, check the documentation to see what the "floor" is and that will tell you the lowest rate you can possibly have.
Contrary to media misinformation, adjustable rate mortgages are adjusting DOWN, not up. Make sure a downward adjustment is allowed in your terms, check the documentation to see what the "floor" is and that will tell you the lowest rate you can possibly have.
Thanks for the info! Only thing I can find is that they will add 2.375 to current index and that "the interest rate I am required to pay at the first change date will not be greater that 11.5% or less than 2.375%. Thereafter my interest rate will never be increased or decreased on any single change date by more than two percentage points from the rate of interest I have been paying for the preceding 12 months. My interest rate will never be greater than 11.5%." Since my current rate is 6.5% does this mean it will not go lower than 4.5% or higher than 8.5% at first change? Thanks again for your help.
That is correct, if your cap is 2, were it to adjust today, your new rate would be 4.5%. If the LIBOR index were to shoot up (doubtful) before March 2011, your max rate at adjustment would be 8.5%.