A “LIBOR ARM” sounds vaguely related to a frozen shoulder. It’s not. Pronounced “Lee′-bore,” it stands for the “London Inter-bank Offered Rate,” a widely used benchmark (or peg) for setting mortgage rates and other debt. Meanwhile, “ARM” stands for “Adjustable Rate Mortgage.” Definition, Please What does all that mean in practice? A homeowner with a...Read More
Cost-Benefit Criterion “Quitting smoking is easy. I’ve done it lots of times.” OK, so refinancing isn’t completely painless — there are some fees involved, and some paperwork to fill out (natch). But, the operative question to ask isn’t, “how long has it been since I refinanced?” or even “how much will it cost?” Rather, it’s...Read More
Blend of Two Variables Answering the question, “what are prevailing mortgage rates?” seems simple enough. After all, the answer should be “5%,” “5.25%,” or something similar, depending on one’s credit scores, and the mortgage product in question (fixed, 5 yr ARM, 10 yr. ARM, etc.). In practice, it’s a little more difficult, because rates are...Read More
Setting the Record Straight on ARM’s It’s easy to think that every adjustable rate mortgage (“ARM”) burned the borrowers who took them out. After all, aren’t so-called “Option ARM’s” supposed to be financial time bombs? They are, but most ARM’s don’t function that way (at least, the ones most common outside of Southern California, Arizona,...Read More
