What is the best financial index to use with an ARM loan?

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Adjustable Rate Mortgage

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    April 30, 2011 at 12:24 am

    What type of loan and term? If your looking at an option arm I personally like the World Savings Pic A Pay as it is tied to the COSI (Cost of Savings Index) which historically moves very slowly thus keeping your fully indexed rate lower…

    Most of the ‘normal’ arms (3/5/7/10 year terms) will be tied to the LIBOR, COFI, 5 year and 10 year treasury note etc… What you really want to watch other than the indexed rate is your margin (take the index and add your margin and there is your interest rate after the loan becomes adjustable).

    Which index to use varies litterally on a daily basis; the market is always in flux.

    Good Luck

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