Montrose, CO Office

Moab, UT Office

Impound (or Reserves) - Portion of a borrower's monthly payments held by the lender to pay for taxes, insurance, and other items as they become due.

Impound Account - Savings account for accumulating that portion of a borrowers monthly payments designated for future payments of taxes and insurance. (Required by lenders for certain types of financing.)

Index - A published rate used by lenders to calculate interest adjustments on ARMs (Index+Margin=Interest Rate). Some indexes are more volatile than others. Common indexes include 1 year Treasury bills, COFI (Cost of Funds Index ) and 6 month LIBOR (London Interbank Offered Rate).

Initial Rate - The rate charged during the first interval of an ARM.

Insolvency - Condition of a person unable to pay debts as they fall due.

Interest - Charge paid for borrowing money.

Interest Rate - The periodic charge, generally expressed as a percentage per annum of the outstanding balance, for use of credit.

Interest Rate Cap - A safeguard built into ARMs to prevent drastic changes in interest rates.