Marin High End Homes | Marin Real Estate

Marin Real Estate

  • Home
  • New Search
    • Basic Search
    • Advanced Search
    • Search by City
    • Search by Neighborhood
    • Search by School
    • Search by Street
    • Search by Zip Code
    • Search by Map
    • Search by MLS Number
    • Search by Builder
    • Search Foreclosures
    • Commercial Real Estate
    • Featured Listings
    • Marin Open Houses
    • Marin Luxury Real Estate
    • Modern Real Estate In Marin
    • Eichler Homes In Marin
    • Marin High End Homes
  • Open Houses
    • Open Houses by City
    • Marin Open Houses
    • Belvedere Open Houses
    • Corte Madera Open Houses
    • Fairfax Open Houses
    • Greenbrae Open Houses
    • Kentfield Open Houses
    • Larkspur Open Houses
    • Mill Valley Open Houses
    • Novato Open Houses
    • Ross Open Houses
    • San Anselmo Open Houses
    • San Rafael Open Houses
    • Sausalito Open Houses
    • Tiburon Open Houses
  • Buying
    • Dream Home Finder
    • Marin County Real Estate
    • Belvedere Real Estate
    • Corte Madera Real Estate
    • Fairfax Real Estate
    • Greenbrae Real Estate
    • Kentfield Real Estate
    • Larkspur Real Estate
    • Mill Valley Real Estate
    • Novato Real Estate
    • Ross Real Estate
    • San Anselmo Real Estate
    • San Rafael Real Estate
    • Sausalito Real Estate
    • Tiburon Real Estate
    • Marin Open houses
    • Marin Luxury Real Estate
    • Marin High End Homes
    • Marin Luxury Properties
    • Modern Real Estate In Marin
    • Eichler Homes In Marin
    • Marin County Schools
    • Marin Walking Information
    • Mortgage Rates
    • Buyer/Seller FAQs
  • Selling
    • What’s My Home Worth?
    • Marin County Real Estate
    • Belvedere Real Estate
    • Corte Madera Real Estate
    • Fairfax Real Estate
    • Greenbrae Real Estate
    • Kentfield Real Estate
    • Larkspur Real Estate
    • Mill Valley Real Estate
    • Novato Real Estate
    • Ross Real Estate
    • San Anselmo Real Estate
    • San Rafael Real Estate
    • Sausalito Real Estate
    • Tiburon Real Estate
    • Marin Open houses
    • Marin High End Homes
    • Marin Luxury Properties
    • Modern Real Estate In Marin
    • Eichler Homes In Marin
    • Buyer/Seller FAQs
  • Blog
  • About
    • Why Choose Us
    • Testimonials
    • Agents
    • Real Estate News
  • Contact
  • My Dashboard
Submit
Marin High End Homes | Marin Real Estate

Marin Real Estate

  • Home
  • New Search
    • Basic Search
    • Advanced Search
    • Search by City
    • Search by Neighborhood
    • Search by School
    • Search by Street
    • Search by Zip Code
    • Search by Map
    • Search by MLS Number
    • Search by Builder
    • Search Foreclosures
    • Commercial Real Estate
    • Featured Listings
    • Marin Open Houses
    • Marin Luxury Real Estate
    • Modern Real Estate In Marin
    • Eichler Homes In Marin
    • Marin High End Homes
  • Open Houses
    • Open Houses by City
    • Marin Open Houses
    • Belvedere Open Houses
    • Corte Madera Open Houses
    • Fairfax Open Houses
    • Greenbrae Open Houses
    • Kentfield Open Houses
    • Larkspur Open Houses
    • Mill Valley Open Houses
    • Novato Open Houses
    • Ross Open Houses
    • San Anselmo Open Houses
    • San Rafael Open Houses
    • Sausalito Open Houses
    • Tiburon Open Houses
  • Buying
    • Dream Home Finder
    • Marin County Real Estate
    • Belvedere Real Estate
    • Corte Madera Real Estate
    • Fairfax Real Estate
    • Greenbrae Real Estate
    • Kentfield Real Estate
    • Larkspur Real Estate
    • Mill Valley Real Estate
    • Novato Real Estate
    • Ross Real Estate
    • San Anselmo Real Estate
    • San Rafael Real Estate
    • Sausalito Real Estate
    • Tiburon Real Estate
    • Marin Open houses
    • Marin Luxury Real Estate
    • Marin High End Homes
    • Marin Luxury Properties
    • Modern Real Estate In Marin
    • Eichler Homes In Marin
    • Marin County Schools
    • Marin Walking Information
    • Mortgage Rates
    • Buyer/Seller FAQs
  • Selling
    • What’s My Home Worth?
    • Marin County Real Estate
    • Belvedere Real Estate
    • Corte Madera Real Estate
    • Fairfax Real Estate
    • Greenbrae Real Estate
    • Kentfield Real Estate
    • Larkspur Real Estate
    • Mill Valley Real Estate
    • Novato Real Estate
    • Ross Real Estate
    • San Anselmo Real Estate
    • San Rafael Real Estate
    • Sausalito Real Estate
    • Tiburon Real Estate
    • Marin Open houses
    • Marin High End Homes
    • Marin Luxury Properties
    • Modern Real Estate In Marin
    • Eichler Homes In Marin
    • Buyer/Seller FAQs
  • Blog
  • About
    • Why Choose Us
    • Testimonials
    • Agents
    • Real Estate News
  • Contact
  • My Dashboard
Submit
Marin High End Homes | Marin Real Estate

Marin Real Estate

  • Home
  • New Search
    • Basic Search
    • Advanced Search
    • Search by City
    • Search by Neighborhood
    • Search by School
    • Search by Street
    • Search by Zip Code
    • Search by Map
    • Search by MLS Number
    • Search by Builder
    • Search Foreclosures
    • Commercial Real Estate
    • Featured Listings
    • Marin Open Houses
    • Marin Luxury Real Estate
    • Modern Real Estate In Marin
    • Eichler Homes In Marin
    • Marin High End Homes
  • Open Houses
    • Open Houses by City
    • Marin Open Houses
    • Belvedere Open Houses
    • Corte Madera Open Houses
    • Fairfax Open Houses
    • Greenbrae Open Houses
    • Kentfield Open Houses
    • Larkspur Open Houses
    • Mill Valley Open Houses
    • Novato Open Houses
    • Ross Open Houses
    • San Anselmo Open Houses
    • San Rafael Open Houses
    • Sausalito Open Houses
    • Tiburon Open Houses
  • Buying
    • Dream Home Finder
    • Marin County Real Estate
    • Belvedere Real Estate
    • Corte Madera Real Estate
    • Fairfax Real Estate
    • Greenbrae Real Estate
    • Kentfield Real Estate
    • Larkspur Real Estate
    • Mill Valley Real Estate
    • Novato Real Estate
    • Ross Real Estate
    • San Anselmo Real Estate
    • San Rafael Real Estate
    • Sausalito Real Estate
    • Tiburon Real Estate
    • Marin Open houses
    • Marin Luxury Real Estate
    • Marin High End Homes
    • Marin Luxury Properties
    • Modern Real Estate In Marin
    • Eichler Homes In Marin
    • Marin County Schools
    • Marin Walking Information
    • Mortgage Rates
    • Buyer/Seller FAQs
  • Selling
    • What’s My Home Worth?
    • Marin County Real Estate
    • Belvedere Real Estate
    • Corte Madera Real Estate
    • Fairfax Real Estate
    • Greenbrae Real Estate
    • Kentfield Real Estate
    • Larkspur Real Estate
    • Mill Valley Real Estate
    • Novato Real Estate
    • Ross Real Estate
    • San Anselmo Real Estate
    • San Rafael Real Estate
    • Sausalito Real Estate
    • Tiburon Real Estate
    • Marin Open houses
    • Marin High End Homes
    • Marin Luxury Properties
    • Modern Real Estate In Marin
    • Eichler Homes In Marin
    • Buyer/Seller FAQs
  • Blog
  • About
    • Why Choose Us
    • Testimonials
    • Agents
    • Real Estate News
  • Contact
  • My Dashboard
Submit

Adjustable Rate Mortgages – The Basics

An adjustable rate mortgage (ARM) has an interest rate that fluctuates periodically. This is in contrast to a fixed rate mortgage, which always has the same interest rate.

Every ARM has basic components:

  1. An index
  2. A margin
  3. Adjustment Period
  4. An interest rate cap
  5. An initial interest rate

The Index

An ARM’s interest rate is tied to one of many economic indices, some examples of which are the 1-year constant maturity Treasury security, the Cost of Funds Index, or the London Interbank Offered Rate. Different indices move at different rates so know the characteristics of the index used for your ARM.

The Margin

The interest rate for your ARM will be calculated by adding a margin to the interest rate from the index. The margin is basically the markup charged by the lender that allows them to make a profit off of your loan, such as adding 2% to the index, where the 2% is the margin. The margin of your loan usually does not fluctuate.

The Adjustment Period

The Adjustment Period controls when and how often your interest rate changes. For example, if your ARM has an adjustment period of 1 year, your interest rate will be subject to change at the end of each year and your monthly mortgage payment will be recalculated to reflect this change.

The Interest Rate Cap

Interest rate caps are built into the loan to protect the borrower from drastic interest rate fluctuations. The caps limit how much the interest rate or monthly payment can change at the end of each adjustment period. An ARM can also have a cap for the life of the loan. For example, during the life of a loan, the interest rate can only be increased by 5%.

The Initial Interest Rate

The Initial Interest Rate is the interest rate that you start with at the beginning of your loan period. The length of time your loan stays at this rate is built into the loan. For example, you may stay at the initial interest rate for 1 year, 5 years, or another length of time depending on your specific mortgage. This type of ARM is generally referred to as a Hybrid ARM. The initial interest rate for an adjustable rate mortgage is generally lower than that of a fixed rate mortgage.

Back to Table of Contents
Marin High End Homes | Marin Real Estate
  • Privacy Policy
  • All Tags

Copyright © 2008 - 2020, All Rights Reserved | DRE Lic #01346729

Owning a home is a keystone of wealth… both financial affluence and emotional security.

Suze Orman
22nd January 2021 Friday!
Marin High End Homes | Marin Real Estate
  • Login
Forget Password?