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libor arm and margin added
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   General Questions-> Mortgage Loan FeaturesMessage format
Posted 2/21/2006 10:11 AM (#810)
Subject: libor arm and margin added
I have a 6 month libor loan and just received my new rate. The index is 4.81 - the margin is 2.000% - the new interest rate is 6.75%. I went on the web site for the wall street journal where the rates are published and saw a program comparing the different adjustable rates. I then plugged in my loan amount and found the 6 month libor rate (I also plugged in the 2.000% margin rate). This program said the new interest rate for the index of 4.81 with my margin of 2.000% was 6.08%. I like 6.08% a lot better than 6.75%. Can you explain this? Thanks.
Posted 2/21/2006 5:18 PM (#813 - in reply to #810)
Subject: RE: libor arm and margin added

It all depends on the day your lender makes the adjustment calculation. Typically it is done one month in advance so the rate may be based off of last months index. Based on what you wrote you should be at 6.81% so Libor was probably lower last month. Rounding will also occur to the nearest eigth. You can always call the customer service line to your lender for the exact information too. Sorry but I can't explain the programs, it seems to be off.
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