Posted by wes on September 23, 2004 at 07:26:59:
FHLB - Federal Home Loan Bank
They are all over the country, FHLB of Dallas, FHLB of New York, etc., so I am assuming the rate your loan was tied to would be from the individual bank offering the loan. I am not aware of one FHLB rate for the whole country, but then again I just do not know!
A “floor” rate, means it will never go lower than that rate.
What is the ‘FHLB Fixed advance rate’??? - Posted by IB (NJ)
Posted by IB (NJ) on September 22, 2004 at 17:55:21:
I’m looking at a mortgage commitment that reads in part:
“The initial rate will be 7% fixed for the first five years and then adjust(ed) for the following five years to the FHLB fixed advance rate plus a margin of 350 basis points. Thoughout the term of the loan there will be a floor rate of 7% or whatever the initial rate is.”
It sounds like to me that the rate will start at 7% (thus the ‘floor’ terminology) and go from there. But I’m unclear as to what the rate will be after 5 years. What exactly is the FHLB rate and where is it today? I see that I will have to add 3.5% to that rate (whatever it is).
BTW, this was a mortage commitment presented to me for a 12 unit apartment building I’m buying. I rejected the loan due to some other crap the bank wanted me to agree to. Thanks in advance for all your help.