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jeff downing Asked:

I'm in an adjustable rate mortgage at 5.25 due to adj. in may to 4.375 the fed just dropped interest rates again after i received a notice from my mortgage co. of the change will my rate adj. even more before may. [marine city MI]

03/19/2008

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Answer Provided by: Danny S. Kim [03/20/2008]
 

ARMs adjust based on a index such as LIBOR or CMT plus a margin (index + margin). Find out which index your rate is based on and the "margin" of your loan. Come May, your lender will take the index at the time of adjustment and add it to the set margin and come up w/ your new rate. http://www.bentleycapital.net/FixedVs.Adjustable