What are the most popular ARM indices?
Adjustable Rate Mortgages (ARM's) use an index to calculate the interest rate you pay. Among the most common indexes are the Cost of Funds (COFI), Treasury Securities (T-Bills), Certificates of Deposit (CDs), and Libor (London inter- bank offering rate). Most metropolitan newspapers publish current ARM index rates.
Some ARM can change as frequently as every month although most common is an annual adjustment in the rate you pay. It pays to examine the type of index your loan will be tied to as some indexes raise faster than others and conversely others drop much slower.
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