Delaware Mortgage Loans

Fully Indexed Rate
The fully indexed rate is the combination of the index we have chosen plus the fixed margin the lender places on the loan. This is often different than the initial rate offered, or the ³start rate². The fully indexed rate will only fluctuate at the adjustment period of your ARM, and may be […]

Margins
On an adjustable rate loan, the amount a lender adds to the index in order to determine the mortgage interest rate at each adjustment period. For example, if the index is at 5.0, and the margin is 1.5, the fully indexed interest rate is 6.5%. The margin is normally fixed for the life of the […]

The Federal Reserve commented on the troubled economy but still kept the Fed Funds Rate unchanged at 5.25%.  The Feds noted that Wall Street Turbulence such as Hedge Funds closing, Main Street Credit problems, and a nationwide housing slump pose increasing risk to the economy.  The Feds are still concerned about inflation so they have […]

Negative Amortization
Amortization is the repayment of a loan by making systematic payments over a set time period which are applied to the combined balance of the principal and interest for that loan amount. Therefore, negative amortization occurs when the payment is less than the required interest that has accrued on the loan for that month.
Summary:
Few […]

Interest Only
Interest is what a borrower pays a lender over and above the original amount of the loan, as compensation for the use of the money over a specified period of time. An interest only loan requires a payment that pays the interest that has accrued on the loan for the current month, but with […]

Fed Funds Rate
The Fed Funds Rate is the interest rate that Banks and other depository institutions charge each other when they lend money to each other, usually on an overnight basis. Federal law requires banks to keep a certain percentage of their customer’s money on “reserve” or right at hand, where the banks earn no […]

Federal Discount Rate
The Federal Discount Rate is the interest rate charged by a Federal Reserve Bank to its eligible member banks and financial institutions when they need to borrow funds directly from the Federal Reserve. Banks whose reserves fall below the reserve requirement set by the Federal Reserve’s Board of Governors use that money to […]

Prime
Wall Street Journal (WSJ) Prime Rate
This is a consensus measure of the Prime Rate, and is published in the Wall Street Journal. The Wall Street Journal surveys the large banks and then publishes their consensus “Prime Rate”, or the rate offered to clients who are considered eligible for “prime” financing terms. The Prime Rate will […]

COSI
Cost of Savings Index (COSI)
A bank receives money from consumers in the form of deposits, and then lends money as home mortgages or other loans. The interest rates in effect on these deposits are the basis for the COSI index. It is not based on actual interest paid, but rather the weighted annualized average of […]

1 Year T-Bill
One-Year/12-Month Constant Maturity Treasury (CMT)
This is an index published by the Federal Reserve Board based on the average yield of a range of Treasury securities, all adjusted to the equivalent of a one-year maturity. The US Treasury determines the yields on these securities by using the “daily yield curve”. The daily yield curve […]