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How is the interest rate calculated on an Adjustable Rate Mortgage (ARM loan)?

April 26, 2017adjustable rate mortgage arm calculated Interest rate loan

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How is the interest rate calculated on an Adjustable Rate Mortgage (ARM loan)?

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The calculated interest rates for an ARM loan is based on an index rate plus a margin. The index is a published rate such as the Prime Rate, Treasury Bill index, or the LIBOR. Changes in the index rate can cause changes in your loan’s interest rate. Please refer to your mortgage documents for details on your loan’s margin.