fixed rate mortgage gloucestershire

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was adjusting, typically, 1-3% higher than the introductory rate. Calculating this is IMPORTANT for ARM buyers, since it helps fixed rate mortgage gloucestershire predict the future interest rate of your loan. Margin - This refers to the banks profit margin above the value of the financial index. The bank seeks to make a profit above the costs of inflation. The index is a measure of fixed rate mortgage gloucestershire cost of funds as measured by inflation. Index - A publicly published financial index such as LIBOR (usually 1 month, 6 month or 12 month), 11th District Cost of Funds Index, MTA, etc. Start Rate - The introductory rate provided to purchasers of ARM loans for the initial fixed interest period. The difference between the "Start fixed rate mortgage gloucestershire of an ARM and the rate of a fixed terms loan is that the "Start Rate". Period - This is the frequency fixed rate mortgage gloucestershire adjustments, the longer the rate remains fixed, the better the loan is for the borrower. Typically, the shorter this is the lower the rate, since there are more opportunities to adjust upwards. Floor - A clause that sets the minimum rate for the interest rate of an ARM loan. Most loans come with a Start Rate = Floor feature, but this is primarily for Non-Conforming (aka Sub-Prime fixed rate mortgage gloucestershire Program Lending) loan products. This prevents an ARM loan from ever adjusting lower. An "A Paper" loan typically has either no Floor or 2% below start. Initial Change Cap - ARM loans have a specified maximum first adjustment that is typically higher fixed rate mortgage gloucestershire allowed on subsequent changes. Periodic Change Cap - The maximum interest rate adjustment for every subsequent periodic adjustment. Life Cap (Ceiling) - The maximum upwards adjustment