ARM's -- MLO Exam
ARM - correct answer ✔Adjustable Rate Mortgage's
Terms with ARM's - correct answer ✔1) Index
2) Margin [spread]
- Index + Margin = Fully Index Rate
Define "index". - correct answer ✔Cost of money
Define "margin/spread". - correct answer ✔Profit margin
Other terms? - correct answer ✔Promo / Discount / Teaser / Start Rate all
just mean the "starting rate"
How do you describe the years in an ARM? - correct answer ✔- 1/1: this is a
regular adj. rate mortgage
- 3/1: Hybrid ARM loan
- 5/1: Hybrid ARM loan
- 7/1: Hybrid ARM loan
- 10/1: Hybrid ARM loan
-and Caps
How to understand the Hybrid ARM loan? - correct answer ✔-a loan where
interest rate does not change for a set number of years and then it adjusts
once a year every year after that.
ARM - correct answer ✔Adjustable Rate Mortgage's
Terms with ARM's - correct answer ✔1) Index
2) Margin [spread]
- Index + Margin = Fully Index Rate
Define "index". - correct answer ✔Cost of money
Define "margin/spread". - correct answer ✔Profit margin
Other terms? - correct answer ✔Promo / Discount / Teaser / Start Rate all
just mean the "starting rate"
How do you describe the years in an ARM? - correct answer ✔- 1/1: this is a
regular adj. rate mortgage
- 3/1: Hybrid ARM loan
- 5/1: Hybrid ARM loan
- 7/1: Hybrid ARM loan
- 10/1: Hybrid ARM loan
-and Caps
How to understand the Hybrid ARM loan? - correct answer ✔-a loan where
interest rate does not change for a set number of years and then it adjusts
once a year every year after that.
