The point in time
when the initial fixed interest rate on an adjustable rate mortgage changes to
an adjustable rate. This date is commonly one to five (1 to 5) years from the start date of the mortgage.
After the initial reset date, the interest rate will continue to reset as often
as once a month.
Investopedia explains
Reset Date -
The new interest rate
calculated on the reset date will be based on an index value such as the
interest rate of one-year Treasury bonds or the London Interbank Offered Rate
or Reserve Bank of India (RBI). or This rate fluctuates as market conditions
change.
The other component
of the interest rate in an adjustable rate mortgage is the lender's margin,
which does not change during the life of the home loan or mortgage loan.
Sep 12, 2013
Sep 12, 2013
No comments:
Post a Comment