David Saks: August 2014

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

Real Estate Practice : Lesson 3607

index

Lender's have had to have some kind of way to determine what the rates are going to be for adjustable rate mortgages.

We could say that rates are determined by the costs of Milk Duds or Junior Mints at the candy counter at the theater. If that were the case, no one could afford a loan. :-)

The reality of the matter is that the rate is based on what we call an Index.

What we perceive to be the most common form of index in the United States is the index of the United States Treasury Securities .

One examp-le is what we refer to as the One Year Treasuries Securities Index.

This is essentially a digest of the rates on one year treasury securities adjusted to a constant maturity level, or the date upon which the financial obligation has to be repaid.

Some other indexes which you might want to study, by searching the web for additional information, include:

FHLBB : Federal Home Loan Bank Board Index

COFI : The Costs of Funds Index

LIBOR : The London Interbank Offered Rate

TABAPI : The Tennessee Averaged Bicycle Air Pressure Index (no such thing, just funnin' with you)

All kidding aside, the Treasuries Securities Index is by wide and far the most widely accepted and used, changes once a week and is reported by the Fedreral Reserve Bank.

The adjustment of the amount on any adjustab;e rate mortgage is at the mercy of the direction of the index in any week that the lender makes a change in the rate.

Spend quality education time talking to about the index.

Can you add any other indexes the list?




David Saks



Time&Temp Memphis

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Comment balloon 0 commentsDavid Saks • August 18 2014 09:27AM
Real Estate Practice : Lesson 3607
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Lender's have had to have some kind of way to determine what the rates are going to be for adjustable rate mortgages. We could say that rates are determined by the costs of Milk Duds or Junior Mints at the candy counter at the theater… more
Real Estate Practice : Lesson 3606
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I wanted to provide you with a list of what I believe might be some of the important factors that cause lenders to set their interest rates the way that they do. I've discussed these factors with clients, customers and colleagues… more
Real Estate Practice : Lesson 3605
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It's simple You just pay more discount points in order to get a lower interest rate. Most lenders seem to agree that there is no absolute as to what to consider the costs to be in the final analysis. The rule of thumb is… more
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My twenty reasons to eliminate junk mail. Works for me How about you Here they are!! 1. The benefit of reducing negative environmental impact is nearly incalculable. &… more
Real Estate Practice : Lesson 3603
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When a buyer doesn't have all of the cash that they need to close, after they've coughed up the downpayment and other loan expenses, the seller might want to come to the rescue and make up the difference. Can this be helpful to the… more
Real Estate Practice : Lesson 3602
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Comparable Sales Method : Not Basement Bargains at Macy's I'm not an appraiser, although I've prepared a few CMA's and BPO's pro bono on napkins for pals at Starbuck's. Appraisers consider what they call the… more
Real Estate Practice : Lesson 3601
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Land Contraks : We Don't Need No Stinkin' Moegagis :-) When the seller provides the primary financing for the buyer the buyer can use an alternative type of financing instead of a deed of trust or a… more
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Real Estate Practice : Lesson 3598
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Acceleration : Puttin' Pedal to da Metal?? Where not talkin' about fast cars and cheetas When a motgage defaults when the borrower fails to repay the loan or by trashing the covenants in the mortgage, the… more