LIBOR MORTGAGES- London Interbank Offered Rate

Click here for exciting new Option Arm w/Fixed Full Indexed Rates

Parameters of the 1 Month Libor Loan
1 Month Libor Index - January 2002 thru Present
How Does the COSI Work?
Interest Only Calculator
COFI Loan
MTA Loan
CODI Loan
COSI Loan
Interest Only Loan
Types of Loans Available
Calculators
Frequently Asked Questions

For more information
Call tollfree - 1-866-535-8987

Would you like a personalized loan comparison? We can send you a comparison of any Option Arm compared to a fixed rate, traditional ARM, interest only mortgage ARM, 1 and 6 month interest only libor arm (no neg am) and 30 year Fixed Interest Only home loan. We can also compare the different option arms for you.
You can be secure in the fact that we will NEVER pull credit without verbal permission from YOU, unlike other lenders.
Click here for your personalized Loan Comparison Request OR ASK US A MORTGAGE QUESTION
Apply Online - Use our secure application
Get Pre-Approved for a loan before you go shopping for a new home
Request a free Rate Quote

LIBOR - an abbreviation for "London Interbank Offered Rate," and is the interest rate offered by a specific group of London banks for U.S. dollar deposits of a stated maturity. LIBOR is used as a base index for setting rates of some adjustable rate financial instruments, including Adjustable Rate Mortgages (ARMs). LIBOR indexed ARMs offer borrowers aggressive initial rates (lower than many other ARMs) and has proved to be competitive with such popular ARM indexes as the 11th District Cost of Funds, the 6-Month Treasury bill, and the 6-Month Certificate of Deposit. With the LIBOR ARMs borrowers are generally protected from wide fluctuations in interest rates by periodic and lifetime interest rate caps. LIBOR ARMs usually do not have negative amortization, although there are now "option arms" available that do have a negative amortization payment option (see below).

PARAMETERS OF THE 1 MONTH LIBOR LOAN WITH POSSIBILITY OF NEG AM

***4/2005 Update - We now also have a lender with a Libor Option Arm mortgage with a 1.00% start rate, 2.225 margin and 9.95 Life Cap - up to 80% LTV. Loans over 80% or over $1,500,000.00 have higher start rates. Libor Option Arm Loans available up to 100% LTV up to 1.3 Million. Margins and prepays can be bought down. Call 866-535-8987 for details.

1 MONTH LIBOR LOAN OPTIONS - NO NEGATIVE AMORTIZATION - THIS IS A GREAT ALTERNATIVE TO THE OPTION ARM BECAUSE THE MARGINS ARE LOWER AND YOU CAN BUY DOWN THE MARGIN TO AS LOW AS 0.750% (MAY VARY FROM LENDER TO LENDER), WHICH WILL KEEP YOUR RATE THE ABSOLUTE LOWEST AVAILABLE TODAY!!!

There are also 1 month libor arms that are strictly interest only with no neg am possible. These have margins as low as 0.750% and come in many variations of terms. For example, interest only guaranteed for 10 years with payments based on interest rate and outstanding principal balance.

6 MONTH INTEREST ONLY LIBOR LOAN OPTIONS - NO NEGATIVE AMORTIZATION - THIS IS ALSO A GREAT ALTERNATIVE TO THE OPTION ARM BECAUSE THE MARGINS ARE LOWER AND YOU CAN BUY DOWN THE MARGIN TO AS LOW AS 0.750% (MAY VARY FROM LENDER TO LENDER), WHICH WILL KEEP YOUR RATE THE ABSOLUTE LOWEST AVAILABLE TODAY!!! THESE ALSO GIVE THE STABILITY OF ONLY CHANGING TWICE A YEAR AS OPPOSED TO EVERY MONTH. CALL FOR MORE DETAILS ON THIS GREAT ALTERNATIVE!!!

There are also a 6 month libor arms that is strictly interest only with no neg am possible. These have margins as low as 1.125% and start rates as low as 2.716*. They also come in many variations of terms. For example, interest only guaranteed for 10 years with payments based on interest rate and outstanding principal balance.

*This rate may change monthly. Please check with lender for updated rate.

1 Year LIBOR ARM, 2 Year LIBOR ARM, 3 Year LIBOR ARM, 5 Year LIBOR ARM, 7 Year LIBOR ARM and 10 Year LIBOR ARM

These libor arms, along with the 1 and 6 month libor arm have the following common characteristics**

o Initial interest rate - This is typically one to three percentage points lower than that of most fixed rate mortgages. Lower interest rates and the popularity of the "Interest Only" option make ARM's easier to qualify for consumers. The initial interest rate is tied to certain economic indicators that dictate in part what the monthly payments will be.

o Adjustment interval - The time between changes in the interest rate and/or monthly payment will be. This is typically 1 year or 6 months. If it is 1 year, the libor index used will usually be the 1 year Libor. If your rate changes every 6 months, the 6 month libor index is used. You can tell which index is being used by the name of the arm -- ie. 3/6 means 3 year fixed period, then it adjusts every 6 months or 3/1 means 3 year fixed period and then it adjusts once a year.

o Index - The Libor index is becoming more popular than the traditional T-Bill index. This is because the libor arms usually have a lower margin than the T-Bill arms.

o Margin - this is what the lender adds to the index to establish the adjusted interest rate on an ARM. The margin is usually 1.75 to 2.250 percent on the Libor and 2.25 to 2.75 percent on the T-bill. The margin is the most important aspect of short term Interest Only ARM's like the 1 month and 6 month Libor products, since this determines your "full indexed rate".

o Period and Life Caps - ARM's contains caps, which limit the amount that the interest rate can go up or down within the adjustment period. For instance, a typical ARM would have an adjustment cap of two percentage points and a lifetime cap of normally 5 to 6 percent over the start rate. This means that a loan with an initial interest rate of 4.75% for the 1st 5 years would be able to go no higher than 9.75 percent over the life of the loan with a 5% lifetime cap. However, some arms are allowed to adjust to the maximm adjustment during the 1st adjustment ONLY, and then every subsequent adjustment will be capped at 2 percent. Be sure to as if your arm has that feature. Most short term Libor ARM's that have margins that you can buydown (you can pay points to get a lower margin as opposed to 6 month libor loans that only offer one margin) like the 1 month and 6 month do not period caps but do have lifetime caps, these caps vary from lender to lender. 6 Month Libor Arm that only offer one margin typically do have periodic caps. Check with your lender to see which type of 6 month loan you are being offered.

** Not all characteristics will apply to all loans. Call for more details. We will gladly answer all of your questions and concerns.

PLEASE CALL FOR MORE INFORMATION ON LIBOR MORTGAGES CALL TOLL FREE 866-535-8987

OR FILL OUT OUR ONLINE MORTGAGE APPLICATION

Copyright © by DRG Marketing - All Rights Reserved