ADJUSTABLE RATE MORTGAGE

1st Nationwide offers Adjustable Rate Mortgage Loans:
The advantage of these ARM loans is that the interest rate is lower than for a 30-year fixed and you still get the advantage of a fixed rate for a period of time.  

A combination of fixed rate and adjustable rate loans:
Fixed-Period ARMs

ARMs with an initial fixed period beside of lifetime and adjustment caps usually have also first adjustment cap. It limits the interest rate you will pay the first time your rate is adjusted. First adjustment caps vary with type of loan program. Fixed-period ARMs are typically tied to the one-year Treasury securities index: 3/1, 5/1, 7/1.

Choosing an ARM Product:

  • Interest rates are lower than a 30 yr fixed rate mortgage
  • Easier Qualification
  • We offer 3/1, 5/1 and 7/1 ARM Products, amortized 30 years.
  • No Prepayment penalties!
  • No Negative amortization!
  • ARMs have the following features:  Index, Margin, Interest Rate  Caps, Adjustment Frequency 
Defination of Index:

An adjustable rate mortgage's interest rate increases and decreases based on publicly published indexes. ARMS are based on different indexes including:

  • United States Treasury Bills (T-bills)
  • The 11th District Cost of Funds Index (COFI)
  • London Interbank Offering Rate Index (LIBOR)
  • Certificate of Deposit Indexes (CODI)
  • 12-Month Treasury Average (MTA or MAT)
  • Cost of Savings Index (COSI)
  • Bank Prime Loan (Prime Rate)
Definantion of Margin:

Margin is a fixed percentage amount that is pointed added to the index - accounting for the profit the lender makes on the loan. Margins are fixed for the term of the loan.    (interest rate = index + margin)

 
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