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Contact Information

Donna Hermsen
Bunbury & Associates Realtors
6650 University Ave
Middleton, WI 53562
Phone: 608 770-1140
Email: DonnaHerms@aol.com

Testimonials

Dear Mr Bunbury, As a former owner of a company we know valuable employees are to your success. This is why we are writing to express our complete satisfaction with Donna Hermsen. A little background on the history of our home at 7809 Cobblestone Circle, Middleton. The house had been on the market for one full year, we had vacated athe house on November 1 and moved to S.C. When it was time to to list again, with a 3rd agent, in January, I spent considerable time on the internet trying to find a new agent. I was impressed with Donna's bio and called her to take a look at the house. Our two sons were in the process of installing some updated light fixtures and were at the house when Donna & Dan looked at it. We also had another agent/team from another agency look at the house while our sons were there. After talking to Donna and the other agent, and asking our sons for their opinion of which agent to list with, it was unanimous that Donna was the choice. I was very anxious listing with anyone, and not meeting them and being so far away (S.C.) from the property. Donna was fantastic, she kept us informed of every showing, she followed up with each possible interested party and her negotiations with the selling agent were very professional. The closing couldn't have gone smoother. All paperwork was done via email, and she was prompt and excellent in any answers to questions we had. I will recommend her to anyone I know back in Middleton/Madison area that is thinking of selling or buying a home. Sincerely, Gloria Kuehn Testimonial Gloria Kuehn
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Adjustable Rate Mortgages - The Basics

An adjustable rate mortgage (ARM) has an interest rate that fluctuates periodically. This is in contrast to a fixed rate mortgage, which always has the same interest rate.

Every ARM has basic components:

  1. An index
  2. A margin
  3. Adjustment Period
  4. An interest rate cap
  5. An initial interest rate

The Index

An ARM’s interest rate is tied to one of many economic indices, some examples of which are the 1-year constant maturity Treasury security, the Cost of Funds Index, or the London Interbank Offered Rate. Different indices move at different rates so know the characteristics of the index used for your ARM.

The Margin

The interest rate for your ARM will be calculated by adding a margin to the interest rate from the index. The margin is basically the markup charged by the lender that allows them to make a profit off of your loan, such as adding 2% to the index, where the 2% is the margin. The margin of your loan usually does not fluctuate.

The Adjustment Period

The Adjustment Period controls when and how often your interest rate changes. For example, if your ARM has an adjustment period of 1 year, your interest rate will be subject to change at the end of each year and your monthly mortgage payment will be recalculated to reflect this change.

The Interest Rate Cap

Interest rate caps are built into the loan to protect the borrower from drastic interest rate fluctuations. The caps limit how much the interest rate or monthly payment can change at the end of each adjustment period. An ARM can also have a cap for the life of the loan. For example, during the life of a loan, the interest rate can only be increased by 5%.

The Initial Interest Rate

The Initial Interest Rate is the interest rate that you start with at the beginning of your loan period. The length of time your loan stays at this rate is built into the loan. For example, you may stay at the initial interest rate for 1 year, 5 years, or another length of time depending on your specific mortgage. This type of ARM is generally referred to as a Hybrid ARM. The initial interest rate for an adjustable rate mortgage is generally lower than that of a fixed rate mortgage.

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