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MTA Loans
One of the many alternatives we offer is
an interest only mortgage based on the 12 Month Treasury
Average. Also know as the 12-MTA.
The Monthly Treasury Average is a
relatively new ARM Index. This is also the same as the 12
Month Moving Average Treasury or 12 MTA ARM.
This ARM index is very similar to the
COFI or Cost of Funds Index and has a potential for negative
amortization with minimum monthly payment and a declining
market.
This index is comprised of the 12-month
average of the monthly average yields of the US Treasury
securities adjusted to a constant maturity of one year. It’s
calculation is comprised the previous 12 month average of the
CMT or Constant Maturity Treasury which is averaged monthly.
The MTA patterns can be defined below,
yet has a history of fluctuating only slightly more than the
COFI ARM and defines security and stability, with the only other
slower moving index being the Cost of Funds Index.
The MTA offers lower margins, start rate
and has many additional features such as minimum and interest
only payment options. Traditionally the Lender offering the MTA
does not sell these loans on the secondary market, thus the
consumer is saved having their loan sold throughout the life of
the loan.
Review below the History of the MTA for
the last couple of years and see for yourself the slow movement
and stability of the MTA!
DATE MTA
May 02 2.667
Jun 02 2.552
Jul 02 2.414
Aug 02 2.272
Sep 02 2.180
Oct 02 2.123
Nov 02 2.066
Dec 02 2.002
Jan 03 1.935
Feb 03 1.857
Mar 03 1.747
Apr 03 1.646
May 03 1.548
Jun 03 1.449
Jul 03 1.379
Aug 03 1.342
Sep 03 1.302
Oct 03 1.268
Nov 03 1.256
Dec 03 1.244
Click on this pdf link to read even more
about the
12 MTA Index Advantage.
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