INFO :
Our offices will be closed on Wednesday, December 25 in observance of Christmas Day. Happy Holidays from the Fulton Family.LIBOR CHANGES AND IMPACT
What you need to know.
ARM Frequently Asked Questions
Updated 4/28/2023
What will happen to my mortgage loan because of this change?
We will transition your ARM loan to the SOFR index in order to determine the periodic interest rate adjustment. Once the LIBOR index is replaced by SOFR, the other terms of your ARM loan, such as the maximum interest rate you may pay during the term of the ARM, or the timing of any interest rate adjustments, will not change.
How is the interest rate calculated?
The interest rate is calculated using the index, plus the margin, and then rounded to the nearest .125%
How will I know when my interest rate will change?
We will send you a written communication about your interest rate and payment change prior to the adjustment. The timing of this notice is outlined in the ARM Note that you signed at closing.
How is my principal payment amount calculated when my interest rate adjusts?
When your interest rate adjusts, we will also calculate the amount of your monthly payment to ensure that your loan will pay off by your maturity date.
Will my loan payment change?
The interest rate and the amount of your loan payment is based on the terms specified in the mortgage loan agreement you signed with us. The adjustable rate on your loan will not change and continue to be based on the LIBOR index until your next scheduled rate change after June 30, 2023. After that date, and when it’s time for the interest rate adjustment, it will be based on the replacement index, which we will be the SOFR index. The payment amount will be based upon the SOFR index as of that date and may be more or less than your current payment amount. We will keep you informed of all changes to your loan, including the replacement rate.
What is the difference between my interest rate effective date and my payment effective date?
The interest rate effective date is the day your interest rate will change, while the payment effective date indicates the date your new payment goes into effect. Your payment change date is typically one month after your interest rate effective date.
Is there a limit on how much my interest rate can increase?
Yes, ARM loans have a rate limit indicating the maximum interest rate for the length of the loan, as well as the maximum amount your interest rate can increase with each adjustment. Your rate limit information is included in the notices we provide when your interest rate adjusts. This information can also be located in the ARM Note that you signed at closing.
What can I do if I cannot afford the new payment?
If you are concerned about your ability to make your new monthly payment, please contact us to explore options that may be available to assist you.
Where can I find additional information?
You may refer to your Adjustable Rate Note for additional information regarding your loan. You may also find additional information regarding ARM loans and the transition from LIBOR to SOFR below:
