Reset frequency

(redirected from Reset Frequencies)

Reset frequency

The frequency with which the floating rate changes.

Reset Frequency

In adjustable-rate loans, the rate at which changes to a loan's interest rate occur. Sometimes, the interest rate changes once a year, but some loans change interest rates as often as once a month or as seldom as every five years. The higher the reset frequency, the higher the financial risk for the homeowner. For example, if the reset frequency is once a month, a homeowner could find his/her mortgage payment increasing every month for five months before it goes down again. This ties up more of the homeowner's income and increases the likelihood of default.
References in periodicals archive ?
The Company's portfolio allocation strategy of investing in short duration assets, particularly adjustable rate mortgage backed securities (ARM's) which have coupon reset frequencies that are one year or less, has enabled the Company to increase its dividend this quarter over the previous two quarters.
Zimmer, said, "The Company's portfolio allocation strategy was modified over the last 21 months such that Opteum has substantially increased its ownership percentage of short duration adjustable rate mortgage backed securities - those which have coupon reset frequencies that are one year or less.
Zimmer, said, "The Company's portfolio allocation strategy was modified over the last 12 months such that Bimini has substantially increased the proportion in its portfolio of short duration adjustable rate mortgage backed securities - those which have coupon reset frequencies that are one year or less.