Zillow Advice: Mortgage Rates - I have a 10/1 LIBOR ARM loan on my home in Florida. Could you please explain to me what LIBOR mean.

Sorry, but I find it very ...

Sun, 05 Jul 2009 16:49:00 GMT

Sorry, but I find it very hard to believe that you did not know you had a adjustable rate mortgage. All over the loan docs, at settlement, it stated that your loan was an Arm, and the Note states all the terms and condiitions of the mortgage. Even if you overlooked that, the title company's attorney would have pointed all that out to you. So, how is it that you totally missed the fact that you overlooked more than a dozen pages of closing docs that showed it was an Arm?

I know many consumers have been duped into taking Arm's and not knowing the terms, but not knowing the glaring fact you closed on one is your fault, regardless of what the LO or Bank of America told you.

It is your responsibility to read the closing docs and if they didn't agree with what you thought you were getting then you shouldn't have signed them.

Charliechet, there are several ...

Sun, 05 Jul 2009 12:23:00 GMT

Charliechet, there are several docs you sign at closing ( RED FLAGS ) highlighting the fact you are taking out an adjustable loan and you are saying you just now realize you dont have a fixed rate mortgage? What is the interest rate on the loan and when did you close on it?

A 10/1 Libor Arm means your ...

Sun, 05 Jul 2009 03:20:00 GMT

A 10/1 Libor Arm means your rate can adjust after 10 years, based on the LIBOR index and margin.

The actual Mortgage Note and REG-Z will disclose this information.

It's a shame that certain lenders will be misleading or not properly communicating with borrowers.

The rate you have been paying ...

Sat, 04 Jul 2009 18:19:00 GMT

The rate you have been paying will continue for 10 years. That is called the "Start Rate." After 10 years, the rate goes to "Fully Indexed." Rudi gave you a good link to Libor and how it moves. Your new rate will be calculated once per year AFTER the initial 10 years. The new rate is the sum of Libor and a margin. The margin will be discussed in your original papers. So, for example, on your 10 year anniversary - if Libor is at 4.0 and your margin is 2.5, your new rate would be 6.5 and that would remain in effect for one year.

Here's a good link for you ...

Sat, 04 Jul 2009 17:41:00 GMT

Here's a good link for you on LIBOR. ... Happy 4th of July, Rudi Hofmann