Standard
ARM Programs
A
few options are available to fit your individual needs and
your risk tolerance with the various market instruments.
ARMs
with different indexes are available for both purchases
and refinances. Choosing an ARM with an index that reacts
quickly lets you take full advantage of falling interest
rates. An index that lags behind the market lets you take
advantage of lower rates after market rates have started
to adjust upward.
The
interest rate and monthly payment can change based on adjustments
to the index rate.
6-Month
Certificate of Deposit (CD) ARM
Has a maximum interest rate adjustment of 1% every six months.
The 6-month Certificate of Deposit (CD) index is generally
considered to react quickly to changes in the market.
1-Year
Treasury Spot ARM
Has a maximum interest rate adjustment of 2% every 12 months.
The 1-Year Treasury Spot index generally reacts more slowly
than the CD index, but more quickly than the Treasury Average
index.
6-Month
Treasury Average ARM
Has a maximum interest rate adjustment of 1% every six months.
The Treasury Average index generally reacts more slowly
in fluctuating markets so adjustments in the ARM interest
rate will lag behind some other market indicators.
12-Month
Treasury Average ARM
Has a maximum interest rate adjustment of 2% every 12 months.
The treasury Average index generally reacts more slowly
in fluctuating markets so adjustments in the ARM interest
rate will lag behind some other market indicators.
