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I obviously don't understand LIBOR


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So, from the way I read things, if the LIBOR is at approximately half of what it was 6 months ago, and my ARM is tied to the 6-month rate, then my mortgage will go DOWN??? The mortgage company can't change their margin, right, and the rate is down, right??? Or am I just completely reading the whole thing incorrectly?

 

I mean, we re-set once already and my rate went up, even though I think the LIBOR was actually down from when we closed. Anybody out there able to lead me through this? I'm obviously reading this wa-a-a-a-y wrong.

 

Thanks

 

BK

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They CANNOT change the margin

What likely happened is that you margin is a large one so if it adjust 6 last time and the index has since gone down your rate should adjust down next time.

 

Most ARMS offer a very low rate to get you in but the index and margin at the time of your initial loan are often 2-3 points higher than the rate

 

You are reading it right just add the margin to the index and know what your adjustment caps are they work both ways

a bank cant exceed the cap when it goes up and you cant exceed it when they go down

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