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Standard ARMs
Mortgage Loan Program |
 Standard
ARMS and the
Differences A
few options are
available to fit
your individual
needs and your risk
tolerance with the
various market
instruments.
ARMs with different
indexes are
available for both
purchases and
refinances. Choosing
an ARM with an index
that reacts quickly
lets you take full
advantage of falling
interest rates. An
index that lags
behind the market
lets you take
advantage of lower
rates after market
rates have started
to adjust upward.
The interest rate
and monthly payment
can change based on
adjustments to the
index rate.
6-Month
Certificate of
Deposit (CD) ARM
Has a maximum
interest rate
adjustment of 1%
every six months.
The 6-month
Certificate of
Deposit (CD) index
is generally
considered to react
quickly to changes
in the market.
1-Year Treasury
Spot ARM
Has a maximum
interest rate
adjustment of 2%
every 12 months. The
1-Year Treasury Spot
index generally
reacts more slowly
than the CD index,
but more quickly
than the Treasury
Average index.
6-Month Treasury
Average ARM
Has a maximum
interest rate
adjustment of 1%
every six months.
The Treasury Average
index generally
reacts more slowly
in fluctuating
markets so
adjustments in the
ARM interest rate
will lag behind some
other market
indicators.
12-Month Treasury
Average ARM
Has a maximum
interest rate
adjustment of 2%
every 12 months. The
treasury Average
index generally
reacts more slowly
in fluctuating
markets so
adjustments in the
ARM interest rate
will lag behind some
other market
indicators.
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