Asked by Cara
A borrower received a 30-year ARM mortgage loan for $200,000. Rate caps are 3/2/6 (initial
adjustment cap/periodic interest rate cap/lifetime interest rate cap). The start rate is 3.50% and
the loan adjusts every 12 months for the life of the mortgage. The index used for this mortgage
is LIBOR, which, for this exercise is 3.00% at the start of the loan, 4.45% at the end of the first
year, and 4.50% at the end of the second year. The margin on the loan is 3.00%, which remains
the same for the duration of the loan.
adjustment cap/periodic interest rate cap/lifetime interest rate cap). The start rate is 3.50% and
the loan adjusts every 12 months for the life of the mortgage. The index used for this mortgage
is LIBOR, which, for this exercise is 3.00% at the start of the loan, 4.45% at the end of the first
year, and 4.50% at the end of the second year. The margin on the loan is 3.00%, which remains
the same for the duration of the loan.
Answers
Submit Your Answer
We prioritize human answers over AI answers.
If you are human, and you can answer this question, please submit your answer.