Margins on ARM Loans – What are They?
Margins on an Adjustable Rate Mortgage loan is the amount a lender adds to the index in order to determine the mortgage interest rate at each adjustment period on the loan. The margin is assigned by the mortgage lender at the time the ARM loan is originated. It cannot be changed once the mortgage loan closes as it is set for the life of the loan. Call 302-703-0727 to apply for an ARM Loan or for more information. APPLY ONLINE
Margins on ARM Loans – Example
Margin example, if the index of the ARM loan is at 5.0%, and the margin was set at 1.5% when the loan was originated, then the fully indexed rate is 6.5%. The margin is fixed for the life of the loan so if the next adjustment period the index is 4.5% then the Fully Index Rate will drop to 6.0% and the monthly payment would be reduced as well.
