Because the prime rate -- the most prevalent interest rate index
used to price a HELOC -- is rising, the HELOC is not the "slam dunk" it used to be, says Richard Redmond, mortgage broker at All California Mortgage in Larkspur and author of "Mortgages: The Insider's Guide." Your best approach is to meet with a mortgage lender to explore your options.
For example, we could think of an ARM contract as a special case of an IRM contract, where the index i is just some spread over realization of the interest rate index
(for example, that of 1-year Treasuries or the London Interbank Offered Rate).
Meanwhile, more respondents (than those who said otherwise) expected interest rates to increase but the number that said so declined, with the interest rate index
reaching its lowest level (at 21.2 percent since Q1 2007).
Short-term loans, with terms of seven years or less, can be cheaper now with a floating rate because the all-in cost (equal to the LIBOR Interest rate index
plus a bank's rate spread) on an adjustable loan is generally lower than the cost of a fixed-rate product.
However, the use of an interest rate index
for determining the rate of return on Islamic financial instruments cannot be considered desirable as interest is prohibited under Islamiclaw.
* Interest rate index
and reset features: The variable rates in both the hedged obligation and the interest rati" swap must be determined using the same index and subject to the same reset periods.
ARMs have interest rates that increase or decrease as a market interest rate index
Others say a variety of regulatory changes -- including a move to let issuers tie in-force premiums to an interest rate index
-- could make their companies more interested in returning to the LTCI market.
The bank announced that Antony Jenkins, 51, would fill the post vacated by the resignation of Bob Diamond in the wake of a scandal over attempts to manipulate a key interest rate index
The joint committee of MPs and peers, under the chairmanship of Treasury Committee chairman Andrew Tyrie, will look into the culture and practices of the industry, following the scandal of manipulation of the Libor interest rate index
by traders at Barclays.
These are more commonly associated with revenue bonds where an organization's income may depend on a particular interest rate index
, yet the debt the organization has issued is based on a different index.
Under the new card law, credit card issuers can issue cards with interest rates that are pegged to an objective, widely promulgated interest rate index
, such as the Federal Reserve's prime interest rate.