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Old 03-08-2008, 09:08 AM
133 posts, read 467,884 times
Reputation: 87


I am curious why the ARM rates are sky high. If they are tied into COFI or LIBOR, and those are at about 3% now, how high can the ARM mortgage possibly be?

I was seriously considering getting an ARM back in 2004, but after several bankers tried to explain the ARM rates to me, I was totally confused and just went with a fixed...but I am curious how they can possibly get so high if the rate they are tied into is so low.
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Old 03-08-2008, 03:21 PM
Location: Great State of Texas
86,068 posts, read 76,871,028 times
Reputation: 27652
Credit is tight so rates are high. The fed cuts will not trickle to consumer rates.

The initial rate is a teaser rate.
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