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What is a 7 year arm loan?

Theresa Perry

in Student Loans

1 answer

1 answer

Brandon Scott on February 17, 2018

Seven years of loan or Adjustable-Rate Mortgage that starts at 7 years with a fixed rate that does not change. Then, the rate will be variable and change every month, or every six or 12 months. The variable rate is based on a mortgage index of the LIBOR, CMT, T-Bill or COFI, which are the most common, and a margin. The margin is added to the index, then usually rounded to the nearest 1/8 (one eighth) of a percentage point. All the rules about how the interest rate changes, are written on an Adjustable Rate Mortgage Note or Adjustable Rate Rider.

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