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Houston Mortgage > Glossary >
Mortgage > # 1-10
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1 month LIBOR rate
LIBOR stands for London Interbank Offered Rate. It's the rate of interest at which banks offer to lend money to one another in the wholesale money markets in London for one month. It is a standard financial index commonly used as a benchmark for adjustable rate mortgages. LIBOR rates tend to move in closer concert with global interest rate benchmarks, such as the federal funds rate, and is a more volatile index than the Monthly Treasury Average.
1 year LIBOR rate
LIBOR stands for London Interbank Offered Rate. It's the rate of interest at which banks offer to lend money to one another in the wholesale money markets in London for one year. It is a standard financial index, commonly used in the United States as a benchmark for adjustable rate mortgages. LIBOR rates tend to move in closer concert with global interest rate benchmarks, such as the federal funds rate, and is a more volatile index than the Monthly Treasury Average.
1-year ARM
A 1-year ARM is an adjustable-rate mortgage (ARM) that has an initial interest rate for one year, and thereafter has an adjustment interval of one year. The adjustment is based on a comparison of interest caps and the indexed rate.
1-year ARM refinance
A 1-year ARM is an adjustable-rate mortgage (ARM) that has an initial interest rate for one year, and thereafter has an adjustment interval of one year. The adjustment is based on a comparison of interest caps and the indexed rate.
1/1 ARM
A 1/1 ARM is an adjustable-rate mortgage, or ARM, that has an initial interest rate for the first year, and thereafter has an adjustment interval of one year. Each annual rate adjustment is based on (or "indexed to") another rate -- often the yield on a Treasury note.
10-year fixed mortgage
A 10-year fixed mortgage is a loan that has an interest rate that stays the same for the 10-year term of the loan. The principal amount is reduced, slowly at first, and then at an accelerating pace, over the life of the loan.
10/1 ARM
A 10/1 ARM is an adjustable-rate mortgage, or ARM, that has an initial interest rate for the first 10 years, and thereafter has an adjustment interval of one year. Each annual rate adjustment is based on (or "indexed to") another rate -- often the yield on a Treasury note.
11th District Cost of Funds
A monthly cost-of-funds index (COFI) reflecting the weighted-average interest rate paid by 11th Federal Home Loan Bank District savings institutions for savings and checking accounts. The 11th district covers Arizona, California and Nevada. The index is published on the last day of the month and reflects the cost of funds for the prior month. The 11th District COFI is commonly used as an index for adjustable-rate mortgages.
12-month moving Treasury average (MTA)
An index determined by the monthly average of one-year Treasury bills. Commonly used as a benchmark for adjustable-rate mortgages.
15-year fixed mortgage
A 15-year fixed mortgage has an interest rate that stays the same for the 15-year life of the loan.
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