ARMS Flashcards

1
Q

What are the main indexes

A

LIBOR, COFI, CMT, Prime Rate

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2
Q

A margin is also known as the:

A

Spread

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3
Q

A starting rate can last from:

A

one to ten months

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4
Q

When the introductory rate is lower than the real rate (fully indexed rate)

A

teaser rate

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5
Q

The length of time between interest changes on ARMS

A

Rate adjustment period

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6
Q

ARM loans help avoid _______ with built in protection called caps

A

payment shock

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7
Q

Allows payment of interests only for a specified number of years (typically between 3 to 10 years)

A

Interest Only ARM

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8
Q

When Option ARMS are automatically adjusted every 5 years

A

Recast

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