ARM

[ktm214]

Can someone please explain a 5/5 ARM and the benefit of it?

Thank You

[ezdriver]

I think that you mean a 5/1 ARM mortgage product.

It means that the mortgage rate will remain fixed for the first five years. After that, the rate will be adjusted annually .... hence the 1 number ... meaning each year. The adjustment will be based on a formula consisting of a publicall published market index [eg: LIBOR] plus a margin and there will be a cap/max interest above which it will be not set.

[jcrsmom]

There is a 5/5 Arm, Navy Federal offers it.

[StartingOver10]

What are the terms of the 5/5 arm?

Fixed for the first five years and then adjusts every 5 years thereafter?  What is the margin and the index?

[jcrsmom]

Yes that's right and I am not sure about the other information.  I didn't ask about information in depth about it yet since I wasn't planning on going that route.