LendSure ARM products will be transitioning from LIBOR (London Inter-Bank Offered Rate) to SOFR (Secured Overnight Financing Rate) for loans closing on or after January 1, 2022.
Our new Jumbo Prime program already uses SOFR index for ARM loans. We are offering three ARM products in the Jumbo Prime category— a 5/6 ARM with a 2% Initial Cap, 1% Periodic Cap and a 5% Life Cap, a 7/6 ARM and a 10/6 ARM product. Both the 7/6 ARM and 10/6 ARM products have a 5% Initial Cap, 1% Periodic Cap and 5% Life Cap. The Jumbo Prime products are presently in a pilot phase and are not yet publicly offered.
In relation to our non-QM programs, we currently are not closing Adjustable-Rate Mortgage loans as there is no pricing advantage over our Fixed-Rate products (no adder for FRM). The ARM product we have on our rate sheet today is a 5/1 ARM with 2% initial caps, 2% interim caps and 5% life caps. We anticipate a similar product with the transition to the SOFR index in January, so caps are expected to remain similar to what is on our rate sheet today.
If you have any further questions, please contact your AE.