We are working on a home with a 1 year adj. rate...when it resets will there be another closing or will it just adjust and the new payment will be sent to us?
It will adjust accordingly to the adjustment rate, there will not be a new closing. Do you know what the index is based on? Whatever the index is at the time of adjustment, the lender will take the current index, add the margin then the adjustment %.
It will adjust accordingly to the adjustment rate, there will not be a new closing. Do you know what the index is based on? Whatever the index is at the time of adjustment, the lender will take the current index, add the margin then the adjustment %.
Hope this helps!
Stockpro99, their rate depends on the index and margin. If the index is LIBOR, they may pay less after 1 year.