The VA Hybrid Arm and the

CMT Index.

Simplifying a very complex topic.

What does it mean to

Simplify?

What parts make up the

VA hybrid Arm loan?• Start Rate

• Margin

• Index

• Caps

• Fully indexed rate

What parts make up the

VA hybrid Arm loan?

• Start Rate

Also know as the NOTE Rate

Rate on your ORIGINAL NOTE AT CLOSING

Today our most popular start rate is 2.25%

What parts make up the

VA hybrid Arm loan?

• Margin

The “space” between two things

(note rate and the index) upcoming slides

At Low VA Rates we focus on

LOW MARGINS and today it is 2%

What parts make up the

VA hybrid Arm loan?

• IndexAn Index is a measurement of the value of a

Section of the market. It is a tool used by

Investors to describe the market at a given time

VA Loans use the CMT Index. 1 year constant

Maturity Treasure

What parts make up the

VA hybrid Arm loan?

• CAPS (1-1-5)Rules in place on each ARM loan that determine

how often and how high or low your rate can go

At Low VA Rates we primarily offer 1-1-5 Caps

1% a year-rate will never go up or down more than 1%

1 time a year-rate can only change once a year

5% lifetime- nor matter what cannot go up more than this from the

START RATE

What parts make up the

VA hybrid Arm loan?

• Fully Indexed Rate

Each time your rate adjusts, the final rate it remains at for the next year

Simple math really. Index + Margin = Fully Indexed Rate

Today the CMT index is .11 our margin is 2% so your fully indexed rate is 2.11%

What is the most

important part(s)?

• MARGIN & INDEX

Lower the Margin the lower your rates once they start to adjust

Lower your index and more stable the index then lower your rate and less moves

Real Life Example

• MARGIN & INDEX

We offer a 2.25% VA hybrid arm and some competitors offer 1.75%

(we can offer the 1.75% too, but suggest a closer look)

Our 2.25% arm has a margin of 2% our competitor(s) has a 2.25% margin

After year 3 if the CMT is at .1 we would have a fully indexed rate of 2.1% and

Our competitor would be at 2.35%

After the fixed period the loan with the lower margin will ALWAYS BE LOWER

Our 2.25% arm has lower fees than our competitor(s) 1.75% also

– Charles H.

"I recently refinanced my VA loan through Jed. He

was very responsive and gave thorough and

honest answers to my many questions. I would

definitely work with Jed again in the future."

Thank you, We hope this was

informative and useful.