Question:

What are the features of the One Year LIBOR rate mortgages?

Answer:

The One Year LIBOR rate mortgage is a great adjustable rate home loan which can qualify you for slightly bigger home loan than you would be able to afford otherwise. Unlike the 1-month LIBOR ARM (adjustable rate mortgage), the 1 Year LIBOR mortgage will provide more stability to the borrower.

1 Month to 1 Year LIBOR adjustable rate mortgages let you qualify for more house.

With One Year LIBOR ARM borrowers get the lower rates common for LIBOR rate home loans, but you also get greater stability and predictability. Your One Year LIBOR mortgage rate will adjust once a year, giving you enough horizon to decide whether to retain the mortgage.

Adjustable rate mortgages are those home loans whose rate changes according to an economic index, such as the LIBOR. They can carry lower initial rate, compared to fixed rate mortgages, but also carry higher risk for the borrowers.

The LIBOR index is quick to change - for borrowers it means that when rates are going down, the LIBOR index rate is the first to go down and subsequently the mortgage monthly payment will drop. However, when rates are going up the 1 Month LIBOR loan monthly payments may skyrocket and you may have to refinance out of the LIBOR ARM into a fixed rate loan.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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