June 16th, 2014
- Please explain the terms of an adjustable rate mortgage (ARM). The margin is 2.25, caps are 2/2/5, the index is LIBOR and it is a 5/1 ARM. The rate is fixed for the first five years of the mortgage, and will adjust 1 time at the anniversary each year (5/1 ARM). When it adjusts, the new rate will be the margin (2.25) + the index (LIBOR), rounded to the nearest .125%. The caps are your maximum adjustment or ceiling, once th e mortgage starts adjusting, it can adjust no more than 2% at the first adjustment, no more than 2% at any adjustment and not more than 5% over the life of the loan (2/2/5).
- We are separating. I am going to buy my spouse out of our current home. How does this work? First you need a formal separation agreement, this determines who is responsible for what and sets some initial financial parameters. Then we refinance the property removing your spouse from the mortgage and deed.
- I am being a home with my fiancée. I want to use my VA eligibility, can she be on the loan or on the title? If you are not married or she is also not in the military - no. VA does not allow a non-spouse or non-veteran to be part of a VA transaction.
Jennifer Keenan, Senior Mortgage Consultant
NMLS# 101837, Tidewater Home Funding (757) 366-8690