Thread Starter: Richard Insley
Title: Re: How do you calculate the APR on an ARM?
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With an initial rate of 5.19 and a fully indexed rate of 3.00 you have a premium priced ARM. This type of pricing can produce an APR that is lower than the note rate, but only if the PFCs don't kick the APR back up to the note rate or higher. PMI could also have that effect.
This was a good exercise. You now know how to take one of these things apart and assemble it blindfolded!
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