Welcome - Get the best real estate listings & homes for sale, expert advice, local info, and much more from Connie, a proven Abington and Cheltenham Townships, Rydal, Elkins Park and Lower Moreland, Pennsylvania NUMBER1EXPERT™ Top Selling real estate agent. Find Abington and Cheltenham Townships, Rydal, Elkins Park and Lower Moreland Homes - Find Abington and Cheltenham Townships, Rydal, Elkins Park and Lower Moreland, Pennsylvania real estate listings & homes for sale provided by Connie, your local expert real estate agent. For Home Buyers - Get home buying information, the latest listings, mortgage informaiton, expert advice, and much more from Connie, a proven Abington and Cheltenham Townships, Rydal, Elkins Park and Lower Moreland, Pennsylvania NUMBER1EXPERT™ Top Selling real estate agent. For Home Sellers - Get home selling information, fsbo information, expert advice, find out what your home and other homes in your neighborhood are selling for, and much more from Connie, a proven Abington and Cheltenham Townships, Rydal, Elkins Park and Lower Moreland, Pennsylvania NUMBER1EXPERT™ Top Selling real estate agent. Abington and Cheltenham Townships, Rydal, Elkins Park and Lower Moreland Information - Find local information on Abington and Cheltenham Townships, Rydal, Elkins Park and Lower Moreland, Pennsylvania including schools reports, local maps and links, things to do, area photos, and relocation information. Local information provided by Connie, a proven NUMBER1EXPERT™ Top Selling real estate agent. Real Estate Resources - Find real estate related resources including real estate news, tips, dictionary, trivia, mortgage calculators and information, local real estate related services, and much more from Connie, a proven Abington and Cheltenham Townships, Rydal, Elkins Park and Lower Moreland, Pennsylvania NUMBER1EXPERT™ Top Selling real estate agent. About Connie - Information about Connie including testimonials, guarantees, credentials, and contact information. Learn why Connie is a proven Abington and Cheltenham Townships, Rydal, Elkins Park and Lower Moreland, Pennsylvania NUMBER1EXPERT™ Top Selling real estate agent.
Please Sign Up For The Latest Listings and the Latest Real Estate News
 |
Financing Your Home >ARMs
Here is a tip for those who are shopping for Adjustable Rate Mortgages (ARMs): the "margin" is almost as important as the initial rate. The margin is the percentage point above the average yields for Treasury notes on which future rate adjustments will be calculated.
Let's compare two hypothetical one-year ARMs. The first may have an initial interest rate of 7% with a 2.5 margin, while the second begins at 6 7/8% with a 2.75 margin. Both loans have rate caps of 2%. Suppose that at the end of the first year of the loan, the average of the one-year Treasury note yield has been 5 1/2%. For each loan, the lenders will add the margin to that 5 1/2% average yield. Thus the interest rate for first loan would increase from 7% to 8%, and the second would go from 6 7/8% to 8 1/4%. While the first ARM had a slightly higher initial rate, it will have lower rates in subsequent years, unless the Treasury note rates increase enough to activate the annual caps on the amount of the increase. There is a wide variance among margins in ARMs offered by competing lenders, and this should be a factor when you decide on your loan.
|
|
|
|
- NUMBER1EXPERT™ 
