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Adjustable Rate Mortgage ARM

Components of a Adjustable Rate Mortgage PDF Print E-mail
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Written by Tamara Schmitt   
Wednesday, 02 November 2005

To understand an ARM, you must have a working knowledge of its components. Those components are:

Index: A financial indicator that rises and falls, based primarily on economic fluctuations. It is usually an indicator and is therefore the basis of all future interest adjustments on the loan. Mortgage lenders currently use a variety of indexes.

Last Updated ( Wednesday, 23 August 2006 )
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Commonly Used Indexes for ARMs PDF Print E-mail
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Written by Tamara Schmitt   
Wednesday, 02 November 2005
Commonly Used Indexes for ARMs

6-Month CD Rate

This index is the weekly average of secondary market interest rates on 6-month negotiable Certificates of Deposit. The interest rate on 6 month CD indexed ARM loans is usually adjusted every 6 months. Index changes on a weekly basis and can be volatile.
Last Updated ( Wednesday, 23 August 2006 )
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