Index

A number used to compute the interestThe cost you pay to borrow money. It is the payment you make to a lender for the money it has loaned to you. Interest is usually expressed as a percentage of the amount borrowed.... rate for an adjustable-rate mortgageA loan using your home as collateral. In some states, the term mortgage is also used to describe the document you sign (to grant the lender a lien on your home). It also may be used to indicate the amount of money you borrow, with interest, to purchase your house. The amount of your mortgage often is the purchase price... (ARM). The index is generally a published number or percentage, such as the average interest rate or yield on U.S. Treasury bills. A marginA percentage added to the index for an adjustable-rate mortgage (ARM) to establish the interest rate on each adjustment date.... is added to the index to determine the interest rate that will be charged on the ARM. This interest rate is subject to any caps on the maximum or minimum interest rate that may be charged on the mortgage, stated in the noteA written promise to pay a specified amount under the agreed-upon conditions.....