Real Estate Glossary



  Financial Index

An index is a number to which the interest rate on an adjustable rate mortgage (ARM) is tied. It is generally a published number expressed as a percentage, such as the average interest rate or yield on U.S. Treasury bills. A margin is added to the index to determine the interest rate that will be charged on ARMs. This interest rate is subject to any caps associated with the mortgage.

The interest rate changes on an ARM are tied to some type of financial index. Some of the most common type of indexed ARMs are:

-- Treasury-Indexed ARMs
-- CD-Indexed ARMs (Certificate of Deposit)
-- Cost of Funds-Indexed ARMs (COFI)
-- LIBOR-Based ARMs

When comparing ARMs, look at how the index to which it is tied has performed recently. Your lender can provide information on how to track the index and a history of the index they use.

 

[ Back To Real Estate Glossary ]

ACCEPTING NEW LISTINGS! We can get it SOLD!! F.R.O.G.


Home | HOMES | LOTS & LAND | COMMERCIAL | TN MLS | NC MLS | BUYER REQUEST | SELLER REQUEST | Buyer/Seller Info | Relocation | Newsletter | Local Weather | Local Links | Community Overview | Local Phone #s | Schools | Contact Us | Our Agents | Mortgage Calculator | Mortgage Rates | Real Estate News | Guest Book

Real Estate Websites by iHOUSEweb, Inc. ®

Site Admin Menu