Libor Loans :: Libor Mortgage :: Libor Mortgage Rates    















   Libor Loans :: Libor Mortgage :: Libor Mortgage Rates


Libor Loans :: Libor Mortgage :: Libor Mortgage Rates

LIBOR  -   London Inter Bank Offering Rates

Florida Mortgage Corporation offers a variety of LIBOR indexed mortgage programs. Loan amounts range from $50,000 to several million dollars. Most residential properties in Florida are eligible.

LIBOR is 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) and other loans.

 

One Month Libor Loan - The interest rate on this loan is the sum of the LIBOR index plus a margin rounded to the nearest one-eighth of one percentage point, (0.125%). The margin will not change throughout the term of the loan however the index Libor Loans :: Libor Mortgage :: Libor Mortgage Ratesvalue will be adjusted every month, which will cause your interest rate to be adjusted accordingly.

Six Month Libor Loan - The interest rate on this loan is the sum of the LIBOR index plus a margin rounded to the nearest one-eighth of one percentage point, (0.125%). The margin will not change throughout the term of the loan however the index value will be adjusted every six months, which will cause your interest rate to be adjusted accordingly.

One Year Libor Loan - The interest rate on this loan is the sum of the LIBOR index plus a margin rounded to the nearest one-eighth of one percentage point, (0.125%). The margin will not change throughout the term of the loan however the index value will be adjusted on an annual basis which will cause your interest rate to be adjusted accordingly.


3/1  -  3 Year Libor ARM - The interest rate is FIXED for the first three (3) years of the loan term.  During years 4 thru 30 the interest rate is adjusted every year to the sum of the LIBOR index plus a pre-defined margin rounded to the nearest one-eighth of one percentage point - (0.125%).

3/6  -  3 Year Libor ARM - The interest rate is FIXED for the first three (3) years of the loan term.  During years 4 thru 30 the interest rate is adjusted every six months to the sum of the LIBOR index plus a pre-defined margin rounded to the nearest one-eighth of one percentage point - (0.125%).

5/1  -  5 Year Libor ARM - The interest rate is FIXED for the first five (5) years of the loan term.   During years 6 thru 30 the interest rate is adjusted every year to the sum of the LIBOR index plus a pre-defined margin rounded to the nearest one-eighth of one percentage point - (0.125%).

5/6  -  5 Year Libor ARMThe interest rate is FIXED for the first five (5) years of the loan term.   During years 6 thru 30 the interest rate is adjusted every six months to the sum of the LIBOR index plus a pre-defined margin rounded to the nearest one-eighth of one percentage point - (0.125%).

7/1  -  7 Year Libor ARM - The interest rate is FIXED for the first seven (7) years of the loan term.  During years 8 thru 30 the interest rate is adjusted every year to the sum of the LIBOR index plus a pre-defined margin rounded to the nearest one-eighth of one percentage point - (0.125%).

10/1  -  10 Year Libor ARM - The interest rate is FIXED for the first ten (10) years of the loan term.  During years 11 thru 30 the interest rate is adjusted every year to the sum of the LIBOR index plus a pre-defined margin rounded to the nearest one-eighth of one percentage point - (0.125%).


Interest Only Loans - Libor Loans
Interest Only Loans are a very popular alternative to fixed rate mortgage loan financing. These programs allow the borrower to pay only the interest owed on the mortgage for a defined period of time such as 3 to 10 years.  This means a number of benefits to the borrower including Greater Purchasing Power and Enhanced Cash Flow.  Although these loans are not for everyone there are still many consumers who can benefit from an interest only mortgage.

Note: Lenders may use the LIBOR rate either as posted by Fannie Mae (Fannie Mae LIBOR) or as published in the Wall Street Journal (WSJ LIBOR) as an index for setting rates of ARM loans. So if your ARM is based on a LIBOR, the loan must specify which one is being used.

The LIBOR quoted in the Wall Street Journal (WSJ LIBOR) is the LIBOR posted by the British Bankers' Association (BBA). Each day the Wall Street Journal publishes yesterday's BBA LIBOR rate as part of the Money Rates table in the Money and Investing Section.

The LIBOR is an international index which follows the world economic condition. It allows international investors to match their cost of lending to their cost of funds. The LIBOR compares most closely to the 1-Year CMT index and is more open to quick and wide fluctuations than the COFI rate.

Caps
A limit on how much the interest rate or the monthly payment can change, either at each adjustment or during the life of the mortgage. Most ARMs have an interest rate caps to protect you from enormous increases in monthly payments.

A lifetime cap limits the interest rate increase over the life of the loan. Lifetime caps can vary by lender, but most ARMs have caps of 5% or 6%. A periodic or adjustment cap limits how much your interest rate can rise at one time. Generally, a 6 month ARM will have a cap of 1% while a 1 year ARM will have a 2% cap.

Indexes, margins, caps subject to change depending upon market conditions. The information is basic only and may not apply to your specific loan program.

 

 

In a speech to a credit union group, Fed Chairman Alan Greenspan questioned whether fixed-rate mortgages were the most cost-effective means of financing a home purchase.  He said "American homeowners clearly like the certainty of fixed mortgage payments" but pay several thousands of dollars a year for the benefits.

Greenspan said homeowners "might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages during the past decade"

Greenspan noted that if homeowners are "willing to manage their own interest-rate risks, the traditional fixed-rate mortgage may be an expensive method of financing a home." Feb. 24, 2004


Start payment rates, interest rates, payment rates, data and program guidelines are subject to change without notice, and are not guaranteed. Deferred interest may apply. APR (Annual Percentage Rate) changes on a daily basis depending upon market conditions. This is a brief outline with basic information only. Other restrictions  and minimum loan amounts apply. Borrower should contact Florida Mortgage Corporation for current details and full written disclosures.

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